The last year has witnessed significant and positive strides in the perception and value of advice. One of the key aims of the RDR was to improve consumer confidence through increased professionalism and transparency. The FCA’s latest thematic review on the subject provided much evidence this was being achieved, thanks in no small part to the parallel evolution of the regulator and the Financial Ombudsman Service.
This progress has also been recognised by the Government and marks a key turning point for the sector.
The FCA’s chief executive Martin Wheatley has certainly noticed the difference. Commenting on the fact the RDR aimed to create a truly professional advice sector acting solely in investors’ best interests, he said the early indications are that the industry has responded positively.
The new pension reforms are already creating an increase in the demand for regulated advice, opening up a range of new opportunities for advisers and providing the sector with the chance to firmly establish an important role in the public arena. However, pension freedoms are also spawning opportunists who could quickly undo all this good work.
We are already hearing examples of non-regulated activities being confused with regulated advice, and the public needs to be alert to the devious methods used by these unscrupulous charlatans.
Increasingly savvy as they may be, how many retirees will be duped by unregulated investment schemes? How can they distinguish between a trusted, regulated adviser and someone trying to swindle them of their life savings?
Having acknowledged the risk publicly, the Government has a duty to protect the public and the sector alike.
Keith Richards is chief executive of the Personal Finance Society