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MP’s ‘horror’ at £1.7bn cost of RDR

Conservative MP Harriett Baldwin says she is “horrified” at the £1.7bn cost of the RDR and the effect that the reforms will have on the accessibility of financial advice.

The MP for West Worcestershire, who secured a Westminster Hall debate in the Commons on RDR this week, claims the proposals are disproportionate and heavy-handed.

Speaking to Money Marketing, she says: “I looked into it and I was really quite horrified that the changes proposed are going to impose a cost on the industry, on consumers effectively, of up to £1.7bn. That estimate has gone up from £600m.”

Baldwin says the findings of the Oxera report on the impact of the RDR, commissioned by the FSA and published in June 2009, are concerning.

She says: “The Oxera report says it is going to put up to 25 per cent of IFAs out of business, reduce the number of transactions and reduce access to advice for lower-income people. It is completely extra-ordinary what this is doing.”

Baldwin agrees with Treasury select committee member and MP for Wyre Forest Mark Garnier that grandfathering should be allowed and adds that voluntary endorsed qualifications should be introduced. Baldwin says: “I think the goal of increasing trust in the industry is a wholly laudable goal. The means to this goal here though seem to be both very heavy-handed and prescriptive.

“If you have a qualification that the FSA approves of that you can put on your business card, some will choose to do that and others might choose not to. Over time, you would think consu-mers will begin to value qualified advisers more if the qualifications are so wonderful.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Oh dear another MP who has listened to the rants of the dinosaur brigade. Lets be blunt they have been too busy spending their huge commissions to be come professionally qualified.

    Please lets just get rid of the 25% under qualified sales people and then we will build an advisory profession that can be trusted. A good use of £1.7 billion in my view.

  2. And how do we know the report by these so called consultants isnt just a load of tosh.I remember reading a report about some work done by this Oxera for New Zealand telecom a while back, after that I wouldnt listen to anything they have to say.

  3. Tony, I am dissapointed with the increasing attacks using inflamatory language by some advisers – Am I a dinoseur for disagreeing with you and Martin Bamford or just someone who has an opinion which does not always agree with either of you. As you will know I have agreed with many things you have said in the past, but comments like this are why I DON’T claim to be a professional as there seems to be an arrogance associated with this claim.

    If you, Martin or the FSA want to get rid of me, then my address is available on the FSA register and I look forward to the visit.

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