AMI stated that the Retail Distribution Review was focused on the investment market and the FSA had said there was no current expectation that a division in the investment market would necessarily follow through to the mortgage or general insurance advice sectors.
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Tracy Mullins, director of public affairs for AMI, commented: “There is little mention of the mortgage market in the paper apart from the fact mortgage brokers might move into the primary advice market, which we have severe concerns about. It is not good news for the middle market adviser, who could be squeezed out.”
The proposals in the Retail Distribution Review could see investment advisers divided into professional financial planners and general financial advisers.
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Professional financial planners would be required to meet minimum practices and standards in order to use the name and could attain ‘chartered’ or ‘certified’ status. There could also be a limit of the term ‘independent’ to firms predominantly of professional advisers.
General financial advisers would continue to provide similar services, but would not have the same in-depth knowledge or qualifications.
Thomas Reeh, chief executive of blackandwhite.co.uk, said: “I’m of the view that mortgages should be full advice and recommendation. The sheer complexity of mortgages is mind blowing, and you cannot sell mortgages on a non-advice basis, particularly in the non-conforming sector.”
