RDR has not had a significant detrimental effect on the numbers of people seeking advice, the FCA has said.
The FCA has committed to undertaking a post-implementation review, which will look at the consequences – intended and otherwise – of the regulatory regime.
However, a spokesman for the City regulator said: “We have not seen any real evidence that the RDR has so far had a significant effect on the number of people seeking advice, or forced out those with less money to invest.
“The number of advisers in the market remains robust. What is more, research we commissioned indicated that there were plenty of advisers still willing to provide services to those with a range of investment pot sizes.”
The spokesman added: “The opening up of an advice gap would be a cause for concern, which is why we have committed to keeping a watchful eye on the market and to produce a post-implementation review.”
The comments came after warnings from the trade body for Luxembourg’s fund houses, the Association of the Luxembourg Fund Industry, that customers risk being orphaned by their advisers, or they may be unwilling to pay for advice, creating the postulated advice gap.
In its 138-page report, Navigating the Post-RDR Landscape in the UK, Alfi said: “The existence of this advice gap is the one area in which the regulator has singularly failed to meet its objectives of bringing better quality advice and better investment outcomes to retail investors.”
The report said the most dramatic changes produced by RDR were in the retail banking channel, which saw flows plummet as a result of an almost universal withdrawal from advice.
Marc Saluzzi, chairman of Alfi, said: “A key question in every market is how more people can be persuaded to save. Regulatory change can be an opportunity to facilitate this, but it will not be enough.”
Adviser view
Keith Richards, chief executive of the Personal Finance Society, said: “The advice gap has of course been growing over the past 25 years, but the effect of RDR has compounded the issue and increased concern that access for many consumers will continue to reduce as the smaller community of qualified professionals focus on the needs of the affluent and high net-worths.
“Encouragingly, the FCA has acknowledge the need to increase access and there is a renewed focus on simplified advice and technology-based solutions to address the challenge.”
He emphasised that one of the RDR’s original objectives had been to increase access to advice.
