Industry experts are warning that steps must be taken to ensure the retail distribution review does not limit consumer access to financial advice.
Addressing the Unbiased. co.uk/Opinium and Money Marketing round table, Axa head of pensions development Mike Morrison said current RDR proposals have lost sight of one of its original intentions, which was to improve consumer access to financial services.
Morrison warns that as advisers segment their client base and remove unprofitable clients, these clients will lose access to decent financial advice.
He says there is a huge number of potential clients who are desperate for financial advice but the RDR is doing nothing to address this.
Morrison says: “There is an increasing number of consumers who are desperate for advice, some who do not even know they need the advice, and we have got the advisers. We need more people, not fewer.”
Evolve Financial Planning director Jason Witcombe says IFA consolidation and a predicted decrease in the number of advisers will inevitably lead to less consumer access to decent financial advice.
He estimates that each time two firms consolidate, around 20 per cent of the bottom end of their client base disappears.
Witcombe says: “For me, the main issue is not necessarily how many advisers there are, it is how many clients there are. For us as a business, that is our main issue.”
Morrison and Witcombe agree that changes need to be made in order to continue attracting consumers to the financial services sector.
Morrison says: “I would like to see the second stage of the RDR, where the review is taken back to the industry and out to consumers, to promote advice and say, ’This is how we can help you’.”