Jeff Prestridge  

These are troubling times for advice

Jeff Prestridge

Jeff Prestridge

There is more, but you get the picture.

Mr Richards said that such premium increases threaten the very future of financial advice in this country.

He also argued that insurers are making it nigh impossible for many advisers to give DB pension transfer advice.

“Financial advisers who have never had a single complaint made against them are being frozen out of the DB pension transfer market because of PII premium hikes and restrictions on cover,” he said.

“This is limiting the public’s ability to access the financial advice they need to exercise pension freedoms.”

Mr Richards said that it is time for some radical action.

Instead of consumer compensation being paid from the current patchwork of PII and levies to the FSCS, he said it should be funded via a “tiny” levy imposed on all retail funds under management.

Such a levy, he maintains, would cover all “existing compensation requirements” as well as fund additional proactive consumer education through the Money and Pensions Service.

Radical? Yes. Do-able? I doubt it, however merited Mr Richards’ suggestions are.

There currently seems little appetite in regulatory circles for such an overhaul and the government has bigger legislative fish to fry.

I am not quite sure what the answer is.

As things stand, the cards are very much stacked against those financial advisers who go about their work diligently. Two steps forward, one step back.

The fact remains that the regulator does not give a hoot about maintaining a vibrant advice sector.

If advice withered on the vine, I imagine it would not bat an eyelid. It would just carry on doing what it does best: very little.

In the meantime, if you are an adviser that has had PII problems, do email the PFS at: PFSNews@thepfs.org. They would love to hear from you.

Jeff Prestridge is personal finance editor of The Mail on Sunday