A warning has been issued by Shadow Work and Pensions Secretary David Willetts that any more financial red tape imposed by the Financial Services Authority on the industry may preclude the poor from obtaining good quality advice. His message is simple, if the industry faces ever higher expenses to comply with the rules and regulations then those costs ultimately get passed to the consumer i.e. the costs of advice will increase.
Our view
has had its Financial Services Authority fees nearly triple in 5 years, its contrubutions to the Financial Services Compensation increase five fold in just one year and its professional indemnity insurances increase five fold in four years. And we have never had a complaint or mis-sold policy investigation.
This is on top of the ever increasing paperwork burden. Whilst we do not mind ever protecting the consumer from poor advice, we have not increased our fees in five years and this is difficiult!
Mr Willets is right to raise concerns. Financial Advisers will increasingly find it hard to offer advice without charging higher fees.