View more on these topics

Wheatley admits ‘concern’ over post-RDR advice gap and hints at action

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“We at the relatively early stages as some banks and insurers have withdrawn but some are working out how they can create a cost effective advisory model to that part of the market.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.”


News and expert analysis straight to your inbox

Sign up


There are 32 comments at the moment, we would love to hear your opinion too.

  1. duhhh!!!!, what a complete and utter cretin!…Far too late mate!

  2. He clearly doesn’t have a clue and is taking a reactionary approach to regulation rather than the required pre-emptive approach that should be taken.

  3. Getting on for 3 billion quid and you’ve only just worked that out ?

    Its not as if you werent told is it !

  4. Do folks with £50,000 really need advice?

  5. I know, ask some potential clients what they want.
    Give then the CHOICE. One size does not fit all.
    Until an individual can take Avive to start saving as little as £50 per month then the regulation has not worked.
    Lets not forget only 220 uphel complaints in 6 months from Networks! I would imagine the results will be the same for DA firms

  6. This guy really cant do right for doing wrong can he ? he is more than useless
    So the FSA break up a model that wasn’t really broken just needed a bit of tweaking, only to find, we have nearly lost our revenue stream and made the whole industry to weak to function properly.

    Now it needs to be fixed by getting more people back on board,
    And we all know what that means ? we will have gone full circle only to end up with a worse animal than we started with !!!

    Still he does have the get out clause of “it wasn’t me it was them”

  7. Pretty sure those in the industry told you this would happen.

    But why take notice of those you believe you are more intelligent than?

  8. “…is still in transition”. If something is still in transition after 6 years sanity would suggest that there is something fundamentally wrong with the item “in transition”.
    Yet the FCA still do not understand that, though the industry have been stating the problems for 6 years.

  9. Love this statement :-

    ” 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 “.

    You complete and utter clueless muppet !!! You really have got your finger on the pulse !!!

  10. I will take an educated guess that there are more people with below £100,000 to invest than there are people with more than this.
    And @Richard Bishop, why don’t they need advice, is advice for the few with lots of money, should “ordinary” folk not deserve advice? is it only for the elite?

    The more I read articles like this and the comments that follow, the more I worry, about the regulators and their total lack of understanding of the consumers who use the industry that they regulate and the advisors lack of joined up thinking.

  11. When I read what comes out of this guys mouth I just want to go back to bed and wake up when his like have been sent packing.

    It’s raining so I might get wet. Where do they keep getting these guys from?

  12. The FSA nor FCA listen to the players I.e IFA,s Those who work in Canary Wharf are a law unto themselves. RDR has not worked for the masses as is plain to see

  13. Same old same old, but who are the REAL dummies? 10th September 2013 at 1:52 pm

    It cant be the people in these positions of power because they are getting paid handsomely for effectively being pretty useless, ineffective or incompetent. Fair play to them.
    So maybe its us in the industry for not acting together properly, maybe its the useless MPs, or the electorate itself?, is it journalists for not properly holding to account ineffective snout in trough behaviour, maybe its all of us collectively for letting it happen and letting it carry on despite the repeated evidence on so many fronts.
    Will we ever wake up?

  14. Like everything else in our silly regulation system, Martin Wheatley doesn’t work properly.

    This time, however, time is not on his side. I am broadly convinced that the IFA model is dead. The earnings achievable no longer justify the personal and financial risk.

    If the FCA do not start treating those that remain as professionals and listening to our views there will be nothing left to regulate.

    Start with: Why is it easier to take out a £5000 loan than invest £5000 in a S&S ISA?

  15. If you can feign sincerity you are halfway to becoming a salesman.

  16. “Most advisers have worked out you can’t provide a fully advised service without five or six hours work and that costs money”
    So why do you keep insisting we need to make it “cheap as chips”?
    If you did not realise that less advisers = less advice, then you are a bigger muppet than you have been given credit for.
    Anyone watch Robert Peston on British shopping habit’s last night? The drive for cheaper & cheaper goods drove good industries out of Britain and overseas where people are paid a pittance. People here lost their jobs and towns and cities lost all their small independent shopping outlets. Tesco replaced them.
    This is the way the regulator is pushing FS.
    So Mr Wheatley if you want everyone to buy a savings plan from somewhere in Indonesia, go ahead, go the whole hogg and switch off trail commission, ruin advisers business’s and livliehoods (those who are left, that is) and in a few years we will have a program bemoaning the fact that in FS you can no longer speak to a human. You have to tell the computer what it is you want. Utopia, no advice, no misselling, no need for a greedy ignorant quango to tell us all how to run a business, something most of them have never or could ever do

  17. It was so painfully obvious RDR would not work and the smug guy who made up RDR has jumped ship and gone to a £3million per year job. I would have questioned his ability to even have him stacking shelves.

  18. World War 2 1939 – 1945

    RDR 2007-2013 and about to start RDR2

  19. We need to look carefully at the original aims of the RDR which was to get more people engaging with financial services. Very, very low numbers of people were saving be it for retirement or longer term needs and the RDR was designed to achieve a boost in saving and sales of other financial services while recognising that many people had lost faith in the industry because of pension and endowment mis-selling. So the RDR wanted different methods for providers to reach the greater masses and the IFA approach was but a very small part of the solution. Remember focused advice? Limited advice? Better information so that consumers can make their own decision? So we have better professionalism and a possible reduction in the possibility of product bias designed to restore faith but in the meantime we have had scandals regarding PPI, interest rate swaps et al working against us.
    The disenfranchising of more from getting independent advice is not a problem that will concern the FCA. It is very small in the scheme of things. What will concern the FCA and should concern everyone is the failure to put in place effective alternative sources of advice for the masses quickly enough. That is where the RDR is failing – and so far quite badly although it is still early days

  20. And next year the FCA will need financial advice on how to fill the black hold in its finances due to the 30% drop in income from reduced adviser numbers.
    Higher fees to clients means less people can afford them resulting in lees people accessing advice, resulting in less advisers, resulting in less FCA fees being paid, fewer providers due to smaller market and margins squeezed.
    It will be a downward spiral from now on

  21. Horse Door Bolted

    (And still a certain person keeps hsi knighthood)

  22. Most IFAs I have met are just retired insurance salesmen with that mentality. Foot in the door, sell anything as long as it makes a lot of money and run. Wake up, the world of financial advice is changing. Trail is going, wealthy people will go to DFMs, and small investors will go to the internet. Patting the dog, sending a birthday card each year and remembering their kids names will only allow you to survive for so long. Time to develop a new approach and way of thinking or retire.

  23. An hour prep, an hour to drive there, two hours with client, an hour home. Send off for quotes, loas etc, do ff, report and research and notes – 6 hours, then go back to see client, another 4 hrs inc travel then submitting biz. 15 hrs plus for a simple case.

    I went to see a couple tonight and their lovely daughter who was 25 showed interest and asked me questions, she was a hairdresser and wanted to set up a pension. She was self employed. She wanted to know if it was worth paying £100pm into a personal pension. She will end up with nothing because no one will set one up for her, I feel so sorry for working people like that. She is the type of person that we need to be building up new pots of cash.

    What is wrong with taking commission on that? She couldn’t pay a fee, she earns £700 pm and lived with her boyfriend

    All people do now is move lump sums about and take a 3 percent fee but no wealth is accumulating.

    If i could get her to sign a form and do it for £150 it may be worth it but the time taken just means its easier to turn the business away, I feel bad but i have to put food on the table and cover costs.

  24. Anonymous 4.25 p.m.

    You are either a muppet, a wind-up merchant or Cicutti under a pseudonym.

    People buy people, people buy products and products solve problems. it ever was so and is no different today.

  25. Anonymous | 10 Sep 2013 4:25 pm

    You really are a fool.

    Advice and sales skills go together.

    No one wakes up in the morning thinking I must take out a pension or life cover. They are more likely to think I must buy that shiny new car I saw the other week.

  26. Anon @ 4.25

    You got a chip on your shoulder ?

    Some nasty salesman must have sold you a General Porfolio Wealth Builder savings plan a few years ago – you have no more clue than Wheatley !

    Bet you’re one of those idiots building a ‘client proposition’ –

    Anon@ 11.13 & Brendan Beagle – Precisely

  27. The full affects of RDR will not be apparent for a while yet but it was clear to all before RDR came into force that the majority of the population would be further disenfranchised from financial advice. Many people will now turn to the internet in a DIY effort of financial planning. The risk must then be of consumers being more and more exposed to unsuitable products with no assessment of their attitude to risk let alone their capacity for loss. Looking further ahead, with an ageing population the likely growth market will be equity release – where will the advice delivery come from?

  28. To anon

    You can never start a pension too early But A young 25 single girl on £700pm looking to put 1/7th of her monthly take home into a pension?

  29. Time the regulator LISTENED and ACTED QUICKLY! 11th September 2013 at 10:13 am

    @ Anon 11.13
    You precisely sum up the mass market problem. And the solution is SOOOOOOOOO simple.
    It is NOT as if you or any of us couldn’t help her, it’s that the regulatory obligation to do things a certain way EVERY time mean it’s not cost effective to do it.
    What we need is for QUALIFIED advisers to be ALLOWED to provide advice SIMPLY if the circumstances of the client require that, or if the client CHOOSES IT (Yes regulator, give the CLIENT the right to choose!)
    You should be allowed to quickly (i.e. same meeting, using your experience and knowledge) provide simple advice about what is and isn’t suitable on a simple single subject. You shouldn’t be obliged to document everything to death and you shouldn’t have any unlimited liability that exceeds say the amount the client paid you.
    You would provide client with a simple recommendation for a solution that will be “suitable” (both not necessarily perfect!) to keep them going until they can afford to pay fees. i.e. something suitable and affordable is better than unaffordable “perfection”. It doesn’t matter if you recommend the same provider every time or not in different situations, there’s no commission so no bias on you either way. You’d just be suggesting what you instinctively think is right.
    They can then DIY the implementation of the specific solution to save them the cost of paying you to do it or they could pay you extra. CLIENT CHOICE again.
    Cost for this – est. £100 max?, with perhaps an extra £50 – £100 if they want implementation help.
    Mass market advice gap disappears overnight.

  30. Anon 10.13

    Its even simply than that – its called indemnity commission or if you like the right of the provider to pay to market their product as is the case in the REAL commercial world – and probably why the RDR is legally questionable if only someone played the restriction of trade card !!

    Let grown ups decide for themselves how/what and when to pay without interference in markets from clueless third parties.

    There is a huge time bomb coming unless more start to save regularly and protect themselves

    The lump sums held in the main by 50-60 somethings (and built up in the main by regular savings) will vest over the next few years but without new money entering the system – well lets work it out for ourselves

  31. Yeah, but hey Dick Sprinkler, what do we know?

    We are just the fitters of the industry, better we leave it to the white-collars and don’t lets get above our station.

  32. Thanks for agreeing gents, im the anon poster at 11.13. Strange i even worry about giving my name due to fear of complaints or the regulator.

    This poor girl will end up with nothing and no wealth building up as she will just spend it.

    It was the first time anyone in her life talked to her about her finances rather than selling a credit card or wonga loan or overpriced handbag, but my hands were tied.

    Surely if I can just get a signature, put the money in a default balanced fund and set it up that should be allowed.

    Yes its simple but we are complicating matters.

    There are many IFAs that will only advise HNW and sadly im having to become one of them too but I don’t want to, I want to help working class people to whom I can make a big difference to their lives rather than shave .1% off a millionaires dfm.

    Without these salesmen, people won’t have big accumulated pension funds and portfolios.

    When this girl has to cut hair till about 74 due to the state pension increasing, who will help her?

    Its disgusting that its come to this,

    Allow commission on regular premiums, have a longstop and dont uphold complaints if the advice is reasonable but not necessarily perfect. Get Britain saving.

    You may think this sounds like im an old insurance salesman but im one of the highest qualified people in our profession.

    Rdr is NOT helping. It used to be say 1.5% amc and nothing else but you’d get commission. Now the client pays twice via a similar 1.5% amc, possibly say .5% ongoing charge in addition and a 3% initial fee too. How is that of benefit?

    Costs have gone up for the client and earnings have gone down for many advisers.

    If Wheatley wants to go out on a Friday night in the rain to meet people to work for free and then have a lifetime, yes a lifetime, of potential complaints about the advice and to potentially pay compensation and regulatory fees then he can, but im not, no matter how much I want to help people.

    I don’t care what anyone says but adviser numbers are falling like a stone and where would a chap wanting to save £200 pm turn to? Its easy to say just go online but in reality they won’t. I could go online to read a guide about servicing my car and then do it myself but unless someone will service it for me then it just won’t get done.

    I could read about doing my own dental work and do it myself but chances are i want to go to a dentist.

    The reason this country stinks is because theyre all too concerned about stopping financial advice.

    That hairdresser can go out today and get a loan on a £5k handbag or take out a 20% apr credit card but can she put money in a pension.? Not on your fuc@&/£ life!

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm