The Financial Advice Market Review will examine regulatory cost and risk, including how future levies should be collected.
The PFS chief executive Keith Richards wrote to Chancellor George Osborne in early July to request a review after the industry was left up in arms with the Financial Conduct Authority’s decision to raise adviser fees by 8.4%. He went on to meet economic secretary to the Treasury Harriett Baldwin, after which he reported to members that the government was broadly committed to reducing the negative impact of regulation.
The PFS said that advisers should provide their input once the government provides a link and they should lobby the support of their local MPs to make sure they understand the issues and impact on constituents.
Richards said: “As the review is government initiated, it represents a genuine opportunity for advisers to help shape the changes for the good of the public and profession alike.
“It is a clear indication the government recognises that the current cost and unlimited liability is impacting on all models of regulated advice and restricting the innovation of low cost entry solutions.
“There is also clear understanding within the Treasury that spiraling regulatory costs are making it difficult for many existing firms to stay in business which, in turn, affects members of the public already under advice and will reduce capacity even further. It also acts as a deterrent to those contemplating entering the market.”
He added: “The knock-on effect this has on consumers and their ability to access professional advice is an area of increasing concern.
“Whilst regulation is in place to protect the public from poor outcomes, in its present form it can ironically restrict access to good outcomes and increase cost.
“A more balanced approach is essential, coupled with reasoned, realistic solutions from the sector for all regulated advice, not just low-cost simplified.”
The PFS said levies currently penalise a small number of contributors, while the free service Pension Wise is making advice look disproportionately expensive by bundling costs into adviser charging structures.
Richards said: “People without significant wealth must have the opportunity to benefit from professional financial advice.
“Any regulatory and legislative barriers that restrict availability and affordability must be removed and replaced with a solution for all regulated models.”
