The director general of the Association of Professional Financial Advisers has called on the Financial Conduct Authority to prove its claims about advice charges.
Chris Hannant said the FCA’s recent claims needed to be backed up with evidence and an explanation of what the regulator will be doing about it.
He said the FCA had alluded to this concern following the completion of its suitability review but called on the regulator to make its evidence public.
Mr Hannant said: “As I understand it we were expecting more details to come out of the findings of the suitability review and it is important that we get that detail.
“It is important that we understand this, not least because I would want the FCA to be able to say that advisers provide good value for money and their clients know what they are getting.
“If we can the FCA has it is more likely that will happen but it is hard to unpack from these four sentences.”
The sentences Mr Hannant referred to were the comments in the FCA’s sector views, published earlier this week.
In this report, the FCA expressed concern that consumers accessing retail investments through financial advice might not be getting value for money.
The regulator has said in retail investments relatively few advisers are transparent about their pricing before they sell advice, adding: “This does not incentivise advisers to compete on price and may result in limited pressure on them to reduce their charges.”
Mr Hannant said the FCA’s comments could be interpreted as advisers failing to follow the rules or that the rules themselves need to be changed.
Keith Richards, chief executive of the Personal Finance Society, said the industry had made “great progress” on this issue in recent years, saying it was “unhelpful” to suggest this wasn’t the case.
He said: “We’d urge for a collaborative and more constructive approach with the sharing of 'good practice' where expectations are clearer and improvements can be more easily identified.
“Coinciding with the introduction of pension freedoms in 2015, the PFS issued a good practice guide to members, outlining some important factors for firms to consider when developing their charging structures and stressing the need for fee transparency.
“The sector has a healthy attitude to learning and the ongoing evolution of the profession, and is always open to address any concerns, whether real or perceived.”
damian.fantato@ft.com
