Demands for reform of the Financial Services Compensation Scheme, attacks on the Money Advice Service, worries over retrospective Government pension changes and a lack of joined-up thinking around simplified advice.
Some headlines have not changed much in the past year as advisers continue to call for more proportionate regulatory fees, a level playing field between advice and non-advice, and a pragmatic introduction of pension charge reforms. But the RDR, introduced on the last day of 2012, is having a dramatic impact, even if some of the fall-out has yet to play out.
Adviser numbers fell by 15 per cent between 2011 and July 2013 – significantly but not as severely as some had predicted, although bank adviser numbers fell by nearly 50 per cent.
The FCA is undertaking four post-RDR thematic reviews and has already raised dealing bias concerns around some charging models.
Research suggests most advisers are using a combination of upfront and ongoing percentage of assets under advice charges. This is understandable given the charging mechanisms prevalent pre-RDR but we may see greater movement towards fixed fees as more firms refine their business models and regulatory scrutiny increases.
We were fortunate that the RDR was accompanied by positive markets and another big charging test may be a sustained bear market.
2013 saw the FSA become the FCA, with senior regulators at pains to point out the new organisation is a very different beast.
Some early signs have been good. It has started to listen to adviser concerns over data collection, although more needs to be done to simplify the process. Changes to the proposed rules on earning warning notices and cuts to consumer credit licence charges were also positive indications of a regulator more in tune with those it is regulating.
Regulatory fee block reform was another progressive measure, although the FCA should have acknowledged the £118m in extra charges the adviser fee block has paid over the past five years and looked to refund it at some point.
Despite huge upheaval, high regulatory costs and continued economic uncertainty, we believe the future for the advice profession is bright, with huge numbers of people in need of valuable professional advice from someone they can trust. Certainly recent predictions of the death of the small IFA have been greatly exaggerated.
On that positive note, we would like to wish our readers and advertisers a Merry Christmas and a prosperous New Year.