Simoney Kyriakou  

FCA's advice stats obscure reality

Simoney Kyriakou

Simoney Kyriakou

The regulator has found positive improvements since the Retail Distribution Review in 2013 and the Financial Advice Market Review in 2016.

Is anyone surprised that the regulator's work should find that the RDR and FAMR – the biggest regulatory shake-ups of the financial advice market – have led to positive outcomes for consumers?

One might have labelled the press release: "Regulator praises its own work".

Self-congratulations notwithstanding, there has been some statistical progress. Among the Financial Conduct Authority's findings were that approximately 8 per cent (4.1m) of all UK adults have received financial advice, an increase from 6 per cent (3.1m) in 2017.

That is surely a good thing – but how much of that has been to do with the RDR or FAMR, and how much due to the legal obligation to get advice on defined benefit transfers? DB transfer advice has already been cited as the reason for significant increases in people seeking a regulated financial adviser since pension freedoms came into force in 2015. 

Can the regulator really claim this as a win for the RDR?

It also declared that adviser numbers are up from 35,000 in 2012 to 36,400 in 2019 – a 4 per cent increase. 

This does not go into the initial decreases in 2013, 2014 and 2015 as many advisers left the industry following the implementation of RDR, nor account for the industry's own significant work over the years to reach young people and bring them into a career in financial advice. 

Is the rise in adviser numbers something that has resulted from the RDR and FAMR, or is it a result of the Herculean efforts of advisers and bodies such as Pimfa and the Personal Finance Society, recognising the widening advice gap and seeking to do something about it?

But these 'victories' being heralded by the regulator are going to inform its work on the consumer investments market. 

You tell me if the concerns of advisers will be taken on board, or batted away by these and similar statistics. 

Simoney Kyriakou is editor of Financial Adviser