FCA chief executive Martin Wheatley has admitted “concern” over the post-RDR advice gap and hinted he could take action to address access to mass market advice.
Speaking at a Treasury select committee hearing this morning, Wheatley said the professionalisation of advisers and removal of product bias had been big successes of the RDR.
However, he expressed concerns over the withdrawal of mass market advice by big banks and insurers. Wheatley agreed with TSC chair Andrew Tyrie that the drop in advice availability needs to be addressed and he could “do more”.
He said: “It is a concern that people with portfolios below £50,000 to £100,000 are not getting the same service they were getting. That is a concern.
“There are some issues with the withdrawal of mass market providers. You can question how much was advice before or just sales dressed up as advice, but nonetheless people below a certain portfolio have less access.
“Most advisers have worked out you can’t provide a fully advised service without five or six hours work and that costs money. Therefore that we are seeing less of that model but we are seeing more web-based, entrepreneurial models delivering advice in a different form.
“We at the relatively early stages as some banks and insurers have withdrawn but some are working out how they can create a cost effective advisory model to that part of the market. It is still in transition.”