The former head of Aviva UK, who is back in his native Australia on gardening leave, cited a new 46-page report from actuarial consultants Rice Warner, which claimed that the regulatory reform, The Future of Financial Advice, would lead to more advice, not less, as is the case in the UK.
The report said: “By 2026/2027 it is estimated that 1.88m pieces of advice will be provided – more than double the 893,000 pieces of advice under a no-reform scenario.”
Mr Matthews said: “I had been a strong supporter of the RDR but it has turned out nothing like the expectation. We wanted more people in the UK to get advice and now we are seeing a greater drop in the number of advisers than anyone had anticipated.
“Also, the UK banks are withdrawing from financial advice, which is a terrible shame. I look at the FoFA in Australia and see that there will be an increase in advisers, in specialist advisers and in the amount of advice. I can’t see the UK situation being sustainable, unlike in Australia.”
He said that with massive changes to pensions in the UK, the “risk of getting it wrong is so high. The more you ponder, the more I think it is important to improve the education and professional standards of the IFA community”.
Also, in Australia, the FoFA has seen more accountants and advisers coming together to work “hand in glove”.
Adviser view
Sue Whitbread, spokesman for the Institute of Financial Planning, said: “While FoFa is similar in some aspects to the RDR, it’s not exactly the same thing. Because FoFA just became mandatory last month, having been operated on a voluntary basis for a year, it may be too early to predict whether the number of advisers is increasing.
“However, the IFP would certainly hope that the Parliament’s projected impact statement that the reforms “will significantly increase the number of advisers giving scaled advice” will be the case over the longer term. We’ll be watching with interest to see how things progress there.”
