The value of the advice
How much advice on personal finance does society need and does regulation get in the way of delivering it? These are among the questions the UK Financial Advice Market Review (FAMR) will be trying to tackle.
The UK Retail Distribution Review, which came into force at the start of 2013, raised the qualification standards for financial advisers, sought to reduce bias by preventing advisers from receiving commissions from product providers in favour of fees for their advice, and changed the definition of what constituted an independent adviser. There has also been more scrutiny of the suitability of advice, and advisers now need to retain much more evidence to show that the advice they have provided to clients has been appropriate.
While raising standards is a good thing, with the historic qualification requirements for providing financial advice being too low, many complain that the tougher regulatory environment makes it significantly more expensive to provide financial advice. This is not a particular problem for the wealthy, but it is becoming more difficult to deliver high-quality independent advice to the mass market and those of more modest means.