The Financial Inclusion Centre director Mick McAteer has argued the consumer detriment caused by high charges “far outstrips” the estimated £30bn consumer detriment caused by misselling.
At a Money Marketing and Cofunds live RDR TV debate yesterday, McAteer, who was previously principal policy adviser at Which?, said he hoped the RDR would see advisers promote the benefits of financial advice and drive value for clients by pushing for lower investment costs.
He said: “Think about the consumer detriment we have seen over the past two decades. I reckon there has been about £30bn worth of detriment associated with misselling costs, pensions, endowments, payment protection insurance. That works out at £1.5bn a year over the past two decades.
“I am willing to bet the consumer detriment associated with high charges, value destruction, and waste and inefficiency in the financial services supply chain far outstrips that. There is a great expectation for the adviser community to drive competition and efficiency through the supply chain. That will deliver more value for consumers than stamping out misselling.”
McAteer, who is also non-executive FSA board member, added he wanted advisers to tackle the “fundamental importance” of the impact of long-term charges on investments, and “stand up and address” the issue of underperfoming funds.
Click here to watch the debate