Advisers dispute usefulness of FSA’s consumer RDR education
Advisers have voiced conflicting opinions in reaction to calls by the Treasury Select Committee for the Financial Services Authority to “redouble” its consumer education efforts in the run-up to the Retail Distribution Review.
Following a letter published yesterday (6 September) from TSC chairman Andrew Tyrie to Martin Wheatley, managing director of the FSA, Mr Tyrie commented: “As the deadline approaches, it is important that the FSA redoubles its efforts to inform the public of the changes and to increase the levels of industry compliance.”
However, advisers are conflicted over the necessity of consumer RDR education.
Peter Chadborn, co-director at IFA firm Plan Money, said: “I don’t see much of a need for consumer education. Advisers know what they need to do and the Financial Conduct Authority will be policing it anyway, and I don’t think many consumers will be very interested.”
A contrasting argument came from Danny Cox, chartered financial planner and head of advice at Hargreaves Lansdown, who said consumer education would be useful for the awareness it generates of advisers and the need for advice.
He said: “It will be positive for the advisory industry generally. The issue is that they are not really talking about the content of RDR but the benefit to the consumer and that’s what we as advisers should be talking about and that will be positive for the industry.”
In his letter, Mr Tyrie also said that because some advisers “will face difficulties in meeting the requirements”, the FSA should remain “flexible to their needs, while maintaining the standards required to protect consumers”.
However, Martin Bamford, managing director for Informed Choice, argued that the Treasury’s letter is the result of a “vocal minority” of advisers who are misrepresenting the readiness of the industry.
He said: “The ones that don’t tend to speak out have been ready for a long time, instead of writing to MPs about something the FSA has been consistent about for a long time.
“The RDR is a good thing for consumers so creating the image that all IFAs are struggling and can’t get qualified and can’t be transparent about fees projects the wrong image.”
Chris Hannant, policy director at AIFA, said: “The vast majority of advisers have either reached the new qualifications requirement or will do so before the end of the year. However, it is right that the FSA takes a flexible approach for those advisers who may miss the deadline due to extenuating personal circumstances.”