Following a review of the way in which financial advice is given in the UK, the new (and allegedly improved) system will be rolled out by the industry regulator, the Financial Services Authority by the end of 2004. Advisers will then have 6 months to adopt the new processes.
The changes that most consumers will see is a 'menu' based system of remuneration and a new tier of adviser, known as a multi-tied adviser. This will be in addition to independent advisers and tied advisers.
There is also likely to be a new document introduced, called an initial disclosure document. This will be given to new clients and will give brief details about the person advising them, what products they can recommend, their credentials and what to do if you have a complaint.
Our View
We strongly believe that the new tier of adviser will only confuse consumers more. This will lead to added mis-selling. We believe that multi-tied advisers will attempt to pass themselves off as independent, in order to obtain the client's business. We have campaigned for a more straightforward system to be adopted by the regulators, as have many others. However, in attempting to make the system simpler, they seem to have made it more complex.