Advice moving at 'glacial' pace: industry on FCA review

“Many people think financial advice isn’t for people like them or they wouldn’t benefit from it and this is a significant barrier to entry. 

“Equally, we know advisers are in great demand and under time-pressure.”

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Ms Waring said innovation was “critical” in the market and agreed the regulator was right to consider what changes were required. 

Regulatory squeeze 

But Martin Bamford, head of client education at advice firm Informed Choice, warned there would be little room to shake up pricing whilst advisers were witnessing increasing regulatory costs themselves. 

Mr Bamford said: “It's a bit rich of the FCA to criticise the IFA market for lack of price competition, when our costs are being driven ever higher by regulatory failure and the growing burden of FSCS levies. 

“If the FCA wants more price competition and wider service delivery for other market segments, it must take immediate action to address the huge cost of providing compensation to customers of failed firms.”

Keith Richards, chief executive of the Personal Finance Society, said it was encouraging to see the number of advisers increasing gradually but agreed the sector still had "further to go".

Mr Richards said: "In contrast the reducing number of regulated firms is a concern and combined with the increasing financial strain, constraints and risk caused by a hardening professional indemnity insurance market and unsustainable increases in regulatory costs.

"One key area to address is the volatility of compensation costs borne by firms in the advice sector, and this can only be addressed by primary legislation, which is beyond the FCA’s scope."