Launched in early August, Richards said the comprehensive review on consumer access to affordable financial advice is a ‘unique opportunity’ after hikes in regulatory levies and the impact on both industry and consumers.
After a meeting with economic secretary to the Treasury Harriett Baldwin, advice trade body head Richards told his 35,500 society members that the government is committed to reducing the negative impact of regulation.
He said the review is a clear indication the government recognises that the current cost and unlimited liability is impacting on all models of regulated advice and restricting the innovation of low-cost entry solutions.
“There is also clear understanding within the Treasury that spiraling regulatory costs are making it difficult for many existing firms to stay in business which, in turn, affects members of the public already under advice and will reduce capacity even further. It also acts as a deterrent to those contemplating entering the market.
“Motivated by pension freedoms and public need, it will give the government a timely and much-needed opportunity to address the capacity and access issues created by the new pensions flexibility, which is leading to complaints from frustrated consumers who are unable to obtain advice for various reasons,” he said.
He called for a government investigation into the impact of regulatory cost and risk, including how future levies should be collected.
Richards said: “We hope the review will give the public the transparency they deserve – consistent with RDR principles – rather than costs being bundled into adviser charging structures and making advice look disproportionately expensive.”
The major review launched by HM Treasury and the Financial Conduct Authority (FCA) will gather examples of problems consumers have faced obtaining advice for mortgages and equity release, general insurance, investments and pensions and savings products.
Helmed by acting CEO of the FCA Tracey McDermott, the review will look at both the barriers to consumer advice and the regulatory constraints which may hamper firms’ ability to provide it.
The government will also consult later in the year on the effectiveness of statutory financial advice services like the Money Advice Service and Pension Wise.
