Cookies on the PFS website

By using and browsing the PFS website, you consent to cookies being used in accordance with our policy. If you do not consent, you are always free to disable cookies if your browser permits, although doing so may interfere with your use of some of our sites or services. Find out more »

Personal Finance Society
Recently added to my basket
 
Sorry but there was an error adding this to your basket. Please try adding it again
 

Backstage with Keith Richards

3rd August 2015

HM Treasury and FCA review welcomed.

 

I welcome the news that HM Treasury has instigated a review into the financial advice market as this follows a Personal Finance Society letter to the Chancellor on 1st July, requesting Treasury intervention. 

I subsequently met with the Economic Secretary to the Treasury, Harriett Baldwin, last week to discuss regulatory cost and impact amongst other matters. To see immediate action being taken by the Government over such concerns is encouraging and a step in the right direction.

The Personal Finance Society raised initial concerns from a public interest perspective resulting from member reaction to the increasing and unsustainable regulatory burden being placed on the advice profession and the knock-on effect this has on the public and their ability to access professional advice.

Whilst the announcement today does focus a lot on improving accessibility to advice, there is a clear understanding at the Treasury that some of the key boundaries to this is the regulatory costs which are not only making it difficult for many existing firms to stay in business, but also acts as a deterrent to those contemplating entering the market.

Regulation is of course a key component in providing consumer protection and influencing good outcomes for the general public, but it is becoming increasingly unreasonable to continue with an outdated funding system that levies unfairly against a smaller number of contributors in a totally different post-RDR landscape.

Regulatory fines were originally intended to influence behaviors and additionally help fund regulation, thereby providing a dividend for the most compliant. Instead, all fines now go to the Treasury and the increased cost burden is being shared by a reducing pool of advisers.

The current funding system is also very opaque from a consumer perspective, with regulation, FSCS, MAS and Pension Wise all appearing to be free. The public deserve greater transparency and consistency with RDR principals, rather than costs being bundled into adviser charging structures making advice look disproportionately expensive.

The profession must, of course, make a proportionate contribution to regulation and consumer protection, but it is time to objectively review whether or not the current system is fit for purpose.

During my meeting with Harriett Baldwin, I was asked to provide further input on the subject and would therefore welcome balanced contributions from the membership to ensure your views are heard. Please e-mail your contribution to: membership@thepfs.org

Best wishes,

Keith
 

About the Blog

In this blog Personal Finance Society CEO Keith Richards will be keeping you up-to-date with all the Personal Finance Society news, projects and initiatives that we have in the works.

Read past editions of the blog »