Libertatem director Garry Heath has called for a new adviser-only regulator to be carved out of the Financial Conduct Authority as part of the Financial Advice Market Review to dramatically cut the regulatory cost of delivering advice.
The recently-founded adviser association stated that advice costs have nearly tripled in the last 15 years and says that without changes to regulation advisers face a fourfold increase in the next decade.
Mr Heath said he was convinced that this is a time for bold thinking and bold ideas. “The adviser industry has been calling for change and we must grab this with both hands. We want to see the creation of a new regulator, separate from the FCA, to provide more accountability, at a cost that is appropriate for the industry it regulates.”
He continued that the UK needs a regulator that will allow advisers to “give their clients a value-for-money product which they can understand.
“Only this will provide advisers with the stability, certainty, accountability and lower cost environment they need to give them the confidence to employ more advisers and invest in their businesses.”
The Heath Report 2 previously suggested that current FCA regulation, whilst well meaning, constricts the level of advice available to consumers suggesting that 13,500 advisers left the industry denying 16 million consumers access to financial advice.
Mr Heath noted that in recent years the amount of advisers in the market has decreased, whilst the regulatory levy has remained unchanged. He says a new regulator could mean industry specific oversight and the creation of a cost structure that will allow firms to grow and flourish.
He added: “Advisers cannot develop strong businesses unless they have a stable regulatory regime that gives them the certainty to plan the development of their firms within a cost structure that is appropriate to the level of regulation.
“We call on the adviser community to respond to support Libertatem in its efforts to create a truly accountable and effective adviser sector for all.”