Two Conservative peers are making a fresh push for the Financial Conduct Authority to allow simplified advice following the recent wave of exits from mass market advice.
Money Marketing figures show the number of bank advisers had fallen 44 per cent on 31 December 2012, the first day of the RDR, compared to the previous year. Since then Santander , Axa and Aviva have also exited the market. Brands such as Lloyds Banking Group, Barclays and HSBC have also either withdrawn from the advice market or limited their offering to those with at least £50,000.
The FSA launched a consultation on simplified advice in September 2011 but refused to relax adviser charging or liability rules meaning it never got off the ground.
Lord Howard Flight says: “I will certainly be raising the issue again and the FCA is committed to reviewing the RDR in the coming year. The team now running it was handed with a fait accompli so I hope they will see the light as the conduits of mass market advice are drying up.”
Lord Robin Hodgson says: “The FCA will need to allow simplified advice to deal with the mass market. It needs to allow judgement and not a hopeless tick box approach that lets people blame all bad decisions on someone else.
”I am interested in finding ways to make sure people are well looked after as they are taking more responsibility for their financial affairs.
Lord Flight warned last August in a letter to the Financial Times that the RDR will result in advisers losing interest in serving clients with less than a £100,000.
Tory peers also said last November the Government was complacent about the effects of the RDR and was facing a “shambles ” and a “crisis” in the savings market.