Financial advice can only be made more affordable when the regulatory burden on firms is reduced, the director general of the Association of Professional Financial Advisers has said.
Commenting on the anticipated increase in demand for affordable advice when next year’s pension reforms come in, Chris Hannant said: “We do believe there is an issue with access to advice and I do believe that the regulator should do more to reduce the regulatory costs.”
While regulation makes up as much as 15 per cent of “smaller” advisory firms’ costs, some simple measures by the City regulator would help reduce this burden, he said.
One suggestion was for the FCA to require firms to file returns once, rather than twice, a year, Mr Hannant added.
Speaking about the financial burden of compliance, he said: “I cannot provide a zero-cost advice service. It is not viable.”
An FCA spokesman said: “We are always conscious of the cost of regulation, which is why we work to ensure our requirements are proportionate.”
Robin Melley, chartered financial planner for Shropshire-based Matrix Capital, said: “This view is too simplistic. Having a robust and relevant regulatory framework actually creates confidence in financial planning.
“Regulation is just one of the cost components of running a financial planning business.”
Earlier this week at the Apfa annual gala dinner, the trade body’s chairman Lord Deben highlighted excessive regulation in financial services as he asked regulators to make life easier for advisers and to make their own operations accountable and transparent.
FCA chairman John Griffith-Jones said during his keynote speech at the event that the FCA wanted to see more people taking advice, especially in light of the pension freedoms, and focused on its attempts to bring about simplified advice models.
He admitted, however, that the RDR project had failed to answer queries relating to “guidance vs advice, and independent vs restricted advice”.
