The latest consultation on MiFID II, launched last month by the European Securities and Markets Authority, will push up the cost of advice as a result of too much paperwork, Clare Griffiths has warned.
The senior policy adviser at the Association of Professional Financial Advisers, said although the body supported the aims of the new directive in ensuring financial firms meet the highest standards when dealing with customers, Apfa was “concerned about the potential cumulative effects of the new rules on the advice sector”.
She said: “The measures being proposed include recording telephone calls, asking clients to sign minutes of meetings and specifying the time periods for issuing reports to clients and having reviews.
“This will add a significant burden to firms as the costs of compliance surge. Worryingly, it is smaller firms who will feel the impact of this the most.”
Ms Griffiths said this ultimately risked excluding even more consumers from being able to access affordable regulated advice, because the cost of the advice would “inevitably” increase.
She added: “Advisers recognise that greater clarity for consumers is critical, but simply increasing the amount of paperwork they need to read through is not the answer.
“Consumers don’t want to read through reams of small print. Regulators need to get smarter at developing frameworks for transparency and disclosure that are consumer friendly, rather than simply increasing the amount required.
“We will continue to make the case for a regulatory framework that is fair and proportionate for consumers and advisers.”
