‘RDR advice gap’ still Widening
A report from adviser champion, Garry Heath, has warned that over 20m will end up without access to professional financial advice, as a knock-on effect of the Retail Distribution Review reforms.
Mr Heath is currently completing a report, known as the Heath Report, which is analysing changes within the advice industry since the implementation of the RDR in January 2013. What is clear already, according to Mr Heath, is that a number of advisers have already left the industry. As well as this, there are many advisers who have been left unable to provide their usual service to existing clients.
Clients who are worst off since the introduction of the RDR are those who were being served by general IFAs who have not developed a segregated advice model or become boutique, described as “undefined advisers”, but were still serving clients who were least likely to be able to pay fees.
There are fears, according to the report, that clients using undefined advisers could be completely “wiped out”.
RDR advice gap
Mr Heath said in the report: “RDR is the paradigm shift in financial services distribution. Currently 3.5 million clients have lost an adviser who has already left the industry. In addition, another 3 million clients are attached to an adviser who no longer has the capacity to service them, totalling 6.5 million.
“This may rise to 14.5 million when the full effects of RDR become clear. The banks have also jettisoned their advice force, leading to an additional 6 million banking clients losing their access to advice.
“So between 12.4 million and 20.4 million UK consumers have lost, or may lose, their access to financial advice. Most of these clients want advice when they need it rather than regularly”.
The report also revealed that the number of advisers in the industry has fallen by 7,000 since November 2009, from 38,750 to 31,750.
Need Advice
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
US authorities have reached a broad agreement
When politicians start to talk in code it can get very misleading, as we have seen over the last few days with regard to the US financial bailout. After admitting that there were large disagreements between the two leading parties in Congress it now seems that all is back on track. But what does a broad agreement mean?
Slowly slowly we are edging towards an agreement which is sure...
UK inflation shows largest fall for over a decade
The announcement of inflation in December saw many analysts disappointed with the 3.1% rate which was a fall from the previous month's 4.1%. Despite the fact that this drop was the largest for over a decade many experts had expected the rate of inflation for December 2008 to have fallen as low as 2.7%. So why was the rate slightly higher than many expected?
It appears as though the...
Plastic £5 notes to be introduced from 2015
23/05/2014 Plastic £5 bank notes will be in use in Great Britain as early as next year when 2 million bank notes are issued by Clydesdale Bank branches. However, only Scottish bank notes will be introduced in 2015, with the Bank of England expected to introduce plastic notes into general circulation by 2016. The Scottish banknote will feature the Forth Bridge on its 125th anniversary as...
Read MoreOlympics fail to Provide Economic Boost
Analysts have delivered a blow to the hopes that the Olympics would provide the UK with a major economic boost, after it was claimed that the event had not returned significant financial gains to the UK, after £9.3bn was spent in preparing for, and running the games. The construction sector did reap huge benefits from the preparation for the Olympics, and the games also provided a good chance...
Read MoreDoes the Cadbury's offer confirm that the recession is over?
Today's £10 billion offer for Cadbury's by Kraft Foods Inc took the markets by surprise with many now under the impression this may well mark the end of the recession. This is by far and away the largest takeover offer for many months and the fact that Kraft Foods believes it can raise the funds required to take over Cadbury is also a very positive sign for investors.
However, if y...