Advisers, trade organisations and professional bodies say the Government’s advice review represents a once-in-a generation opportunity to help shape regulation.
But there are also fears among the profession that the review will mean duplication of effort with other ongoing inquiries or that the focus on advice could be sidelined.
The review, published this week, will be led by the Treasury and the FCA and will look at how the advice market can deliver better outcomes for consumers. Final proposals are expected ahead of next year’s Budget.
It will run alongside a Government probe into exit fees, a Work and Pensions committee inquiry into Pension Wise and pension freedoms advice, and work being carried out by the Money Advice Service after an independent report called for the organisation to be overhauled
The FCA says it plans to continue its own work analysing the implications of the RDR, but added resources have yet to be allocated. Any work would come after its collaboration with the Treasury.
Institute of Financial Planning chief executive Steve Gazzard says: “The difference is this is a strategic piece of work.
“Many of the other pieces are purely in reaction to some issues that have arisen, like the work on exit charges. Those are all operational points that have come out of pension freedoms because the reforms were implemented with limited or no consultation.
“I hope the interest will remain around the strategic issues in the advice market but fear the Government may end up focusing on the issues that are much easier to complain about.”
Personal Finance Society chief executive Keith Richards admits there is a risk of duplication and distraction from addressing the issues in the advice sector as a result of the sheer volume of work going through Westminster and Canary Wharf.
But Richards is still encouraged that the Government is showing commitment to improving advice.
He says: “In the past this sort of thing would have just been done by the regulator, so the involvement of the Treasury is quite significant.
“The fact the Treasury has chosen to publicly confirm it sees the need for an evolution of regulation is a further positive indicator that Government is concerned about its impact of regulation more broadly. In part that’s because of the importance of pension freedoms to this Government.”
Chase De Vere head of communications Patrick Connolly says many of the issues raised by the review have been common complaints among the advice profession.
He says: “There’s nothing new here. Everything that is to be analysed is well known, such as the lack of access to advice, and it’s difficult to see what the actions or conclusions that will be that can help to improve the situation.”
Trade body Libertatem chief executive Garry Heath says advisers must seize the opportunity to shape the regulatory agenda.
Heath says: “The only two things that would be bad for advisers is having a consultation and not taking part, or not having one at all.
“Some have already suggested this will be a stitch-up, but that will only be the case if advisers do nothing.
“So they can either sit there and wait for something to come along, or they can stop being hostages to fortune and start putting forward what they want to see out of this review.
“This is the best opportunity that advisers have had for 20 years and it isn’t going to be here for very long.”
Chris Williams, chief executive, Wealth Horizon
The most striking part of this review is it comes close to admitting the RDR created an advice gap. The FCA has tried to suggest that hasn’t been the case in the past so admitting there is a problem is an excellent first step.
If we can recognise advice is valuable and important, then that’s a step away from the execution-only services filling the advice gap.
Dennis Hall, managing director, Yellowtail Financial Planning
This is quite a wide-ranging “we are not saying anything” review at the moment. The fact a report is not due back until next year’s Budget means it’s not going to be as far-reaching as an RDR review. The Government will be looking for what quick wins it can get.
You have to wonder whether its related to the sacking of Martin Wheatley, and a move to bring some accountability to the regulator in whether consumers can access advice.