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‘RDR will only have short-term effect on access to advice’

Kinder Institute of Life Planning president George Kinder believes the RDR will only limit access to advice in the short term.

The FSA’s original RDR discussion paper, published in June 2007, said the review would address consumer access to financial products and services. Access to advice is no longer stated as one of the aims of the RDR and many advisers fear the mass market will not be able to afford their services.

Kinder argues that as the financial advice market becomes more professional and geared around customer service rather than product sales, access to advice will not be a problem.

He says: “The banks’ strategy on financial advice is the same as it was five years ago, in that it is about selling products in volume. Without a vision of where the financial services industry is heading, we would stay in a terrible place where working-class people do not get advice.

“But there are a lot of good advice firms that are reaching out to the mass market and are committed to working with middle-income people. The word is going to get out so while in the short term, access to advice will be an issue, in the medium to long term, I am not worried.”

FSA head of investment policy Peter Smith told Money Marketing last month the regulator had done all it can to minimise the number of people who cannot afford to pay for advice by allowing the adviser charge to be taken from the product as part of regular contributions.

Philip J Milton & Company managing director Philip Milton says: “The RDR will have short-term and long-term ramifications for access to advice. That makes me sad because I do not know what is going to fill the gap for the people at the bottom.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. Julian Stevens 4th May 2012 at 10:04 am

    What’s pushing up the cost of advice more than the RDR are:-

    1. four tiers of regulatory levies plus

    2. all the additional interim ones being imposed on us by the FSCS to clean up what seems to be an endless succession of provider collapses as a result of regulatory failures on the part of the FSA and

    3. increasing PII premiums due to the FSA’s relentless programme of hindsight reviews, again triggered by its own regulatory failures.

    Last year the FSA raised its operating budget by, what was it, 10%, and this year by a further 16%. No system of checks and balances exists to limit these increases. The FSMA 2000 gives the FSA carte blanche to do whatever it likes and the TSC is powerless to change that.

    The MAS was launched without consultation yet, within a year, it had to admit that half its staff were surplus to requirements. £4m was gaily blown on a TV awareness campaign which it had to admit achieved nothing much at all. Shortly after that, it announced a doubling of its budget to fund the costs of debt advice, to be paid for by an industry whose primary purpose is to help people protect and to accumulate wealth. Where’s the logic or fairness in that?

    Each and every provider failure is deemed to be the fault of the intermediary sector because a small number of intermediaries may have sold its products inappropriately. How’s that? How can a small number of inappropriate sales of its products have caused the provider to fail? Inappropriate sales and the failure of the provider are two completely separate things ~ except in the eyes of the FSA, which sees the latter as yet another handy mechanism with which to bludgeon the intermediary sector.

    So let’s just get a bit of perspective here ~ the RDR isn’t what’s pushing up the costs of advice. It’s everything else that the FSA is doing as part of that prejudicial agenda against IFA’s which Hector Sants would have us believe the FSA doesn’t have.

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