MPs have challenged the FCA over the success of the RDR and the regulator’s claims that adviser numbers have increased following the reforms.
In a testy exchange with MPs at a Treasury select committee hearing this week, FCA chief executive Martin Wheatley said there had been a “big increase” in advisers because of the RDR.
He also claimed it would spur innovation, boost the savings culture and that it has removed commission bias.
Conservative MP Mark Garnier quizzed Wheatley on whether the RDR had been a success.
Wheatley said: “The consumer is much better served by the new system. We have removed the commission bias that existed for some, not all, which was paid to the intermediary.
“We have a professionalised industry with more qualified IFAs and bank staff. And we actually have more advisers today than we had a year ago so we are seeing growth in the industry too.”
Garnier said there were ”significantly fewer” advisers today than three years ago but Wheatley blamed the banks’ exit from mass market advice.
FCA rsearch showed a 20 per cent fall in IFAs and restricted advisers between December 2011 and December 2012 from 25,616 to 20,453.
The latest FCA figures, published last month, show the number of financial advisers rose by 7 per cent 21,684 as of January 2014. This is likely to reflect more advisers achieving QCF level four during the year.
Essential IFA managing director Peter Herd says: “The FCA should continue to look at adviser numbers over five years from when the RDR was introduced, not just over a one year period.”