Former Treasury select committee chair Lord McFall has tabled an amendment to the Financial Services Bill that would require the Financial Conduct Authority to have regard to how easily consumers can access financial advice.
In the new regulatory regime, the FCA will have a strategic objective of ensuring that financial markets and the market for regulated financial services “function well”.
It will also have three operational objectives of “protecting and enhancing the integrity of the UK financial system”, “securing an appropriate degree of protection for consumers” and “promoting effective competition in the interests of consumers”.
Under its competition objective, the FCA must have regard to what consumers need to make informed choices and the ease with which they can switch providers.
Labour peer McFall wants this amended so the regulator must also have regard to consumers’ “ability to easily access financial advice”.
As the bill passed through the House of Commons, the Government refused to back a single Labour amendment.
Lansons director of regulatory consulting Richard Hobbs says the amendment would not affect the RDR but the regulator would be under more pressure to deliver effective solutions to the resulting advice gap.
He says: “It would put pressure on the Money Advice Service to improve and the FSA to finally deliver on simplified products and advice.”
An FSA spokeswoman says: “Original forecasts that the RDR would cause a big drop-off in advisers seem not to be materialising, so we are not concerned in that area.”
Lord McFall was unavailable for comment.
Baronworth Investment and Financials director Colin Jackson says: “This would be very welcome because many people are not going to be able to afford advice after the RDR.
“The question is, can they make advice affordable for clients and profitable for the IFA?”