New face of advice

Independent financial advisers have existed since 1988, when the Thatcher government sought to differentiate between those working direct and those offering whole-of-market products.

In other words, those working for the banks and life insurance/bancassurance companies, and those working for themselves.

Back in the 1980s, there were 100,000-plus individuals able to offer financial advice; exact figures are unclear because regulation did not exist in the form it does today but that total would have included many tied advisers.

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And since those heady days of the 1980s financial advisers and regulation have undergone almost as many incarnations as the pop star Madonna.

There was of course the great depolarisation event of October 2004, and the day when mortgage advice officially came under the umbrella of regulation.

Then polarisation crept in again and from the end of 2012 things looked extremely similar to the 1980s - aka polarisation.

Among this flux came A-Day, or pensions simplification, in 2006.

According to a Freedom of Information request submitted to the FCA, there were 105,710 regulated financial advisers as at 1 January 2006.

Ten years, A-Day and a Retail Distribution Review later the number of level-four qualified advisers in the UK was 29,144.

There is no doubt regulation was necessary in the 1980s, as the pension and investment mis-selling scandals emerging from that period have shown, but regulation and the raising of professional standards has come at a huge cost.

But scandals still continue and the question has to be asked – is today’s regulatory environment the result of civil servants in high places clinging on to their jobs or an attempt to provide the best possible protection and choice for UK consumers?

Because it is looking more a case of the former than the latter.