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.”