Consumer press begins RDR push with ‘free’ advice warning
Despite occasional isolated reports, most papers have broadly avoided discussing new rules.
Having broadly ignored the upcoming Retail Distribution Review for so long, the consumer press seems to be determined to finally begin discussing the effects the new rules are likely to have on individuals, with one article published at the weekend warning of an end to ‘free’ advice.
The story was published in The Observer yesterday (11 August) and is the first piece published by the paper or its sister title The Guardian that in any way addresses the RDR since February 2011.
The article discusses the changes to remuneration that will come into force from January 2013 and, specifically, focuses on the argument that the move away from commission will mean many advisers will focus services on higher value clients that are more willing to pay fees.
The paper quotes Prashant Vaze, chief economist at Consumer Focus, who said: “This is likely to limit access, especially on investment products such as equity Isas, trusts and bonds that people typically buy from their banks through advisers”.
Most of the consumer press have hitherto paid little attention to the new regulations that are coming into force, with Jeff Prestridge, personal finance editor of the Financial Mail on Sunday, admitting that his paper even avoided discussing RDR in a recent article about the value of financial advice.
In a column for FTAdviser sister paper Financial Adviser earlier this month, he said that “personal finance journalists... prefer to write about things that the public can act upon immediately rather than about matters that are on a distant horizon”.
Of the broadsheets, The Telegraph has written about the RDR directly once in 2012, though the article, which was published in July and focused on a lack of engagement by advisers, seems primarily designed to promote the paper’s own ‘investment and savings service’, provided by Skipton Financial Services.
The Independent has mentioned the RDR in a number of articles this year, but has not written directly about the new rules or the consequences of them.
This lack of discussion is partly to blame for a lack of awareness of the upcoming rule changes and what they will mean, with a recent study by Deloitte claiming that 84 per cent of consumers are completely “unaware” of the RDR.
Many advisers and other financial services professionals have hit out at the Financial Services Authority, saying not enough has been done to ensure consumer awareness of the new rules.
For its part, the FSA has said it will imminently launch a broad campaign to make consumers aware of the RDR and its consequences.