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“RDR will not create an advice gap”

Cofunds TV

The Financial Inclusion Centre director Mick McAteer does not believe the RDR will lead to consumers being unable to access advice and argues it may prompt providers to extend advice availability.

Speaking at a Money Marketing and Cofunds live RDR TV debate last week, McAteer dismissed the suggestion consumers will not be able to access advice from next year.

He said: “I keep reading things about how the RDR is going to create an advice gap and is going to exclude more consumers. I happen to work for The Financial Inclusion Centre, where we are interested in making sure people are included and well provided for. I would not have supported the RDR if thought it was going to lead to greater financial exclusion.”

McAteer said post-RDR providers would have more resources to develop ways to serve the mass market.

He said: “I think what will happen here if the RDR works and if providers and distributors behave, is we will see a much more efficient financial services industry, and that will lead to a massive reduction in the unit cost of distribution. If we get that, we will see providers being able to reach out and extend access to even more consumers. So in the long-term I think will be a positive for provision and financial inclusion, not detrimental.”

McAteer’s comments follow research from the FSA last week which found most advisers plan to continue advising clients with investments up to £75,000.


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  1. For once I agree with McAteer, in that the RDR in itself will not create an advice gap. What he’s overlooking, though, is that the burdens and costs of inefficient, bureaucratic and frequently unjust regulation have already created an advice gap.

    The costs of advising on, documenting and arranging something as basic as just an ISA are completely disproportionate to any small investment. It’s barely profitable if you charge £500 and many would say it’s barely profitable to charge twice that. The chunk that takes out of a modest investment is so large as to destroy the viability of taking advice. Can’t Mr McAteer see that?

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