Less than one in 10 people will be able to afford “professional” financial advice, with the vast majority of the population in the primary advice bracket, according to the FSA’s own statistics.
In its retail distribution review discussion paper, the FSA says the costs of professional requirements for firms operating at the top end of the market could mean only richer clients will get access to professional, independent advice.
The paper says: “The consequence of this may be be fewer firms and advisers offering services to the many other consumers who need to save and have the means to do so, most likely those on middle incomes.”
The RDR defines middle income as earnings £25,000-£50,000 a year but the Office of National Statistics says the average wage in 2006 was only £24,301 and the average wage for the top 10 per cent of the population was £42,048.
Aifa deputy director gen-eral Faye Goddard says: “I do not think that you can set affordability on a minimum and maximum level as it is about disposable income.”
An FSA spokesman says: “This is a discussion paper. It is for consumers, consumer bodies and the industry to talk about how it will work.”