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Positive Solutions Calls For FSA 'Hearts And Minds' Consumer Campaign To Smooth Path of RDR
06/07/2009
Printable version
Printable version
The FSA need to carry out an effective education campaign
Positive Solutions has called on the Financial Services Authority to commit to undertaking a nationwide 'hearts and minds' awareness campaign outlining how consumers will benefit from proposed reforms of the financial advice market.
The UK's largest National IFA said the shake-up of the advice market outlined in the Retail Distribution Review needs to be accompanied by an effective FSA education campaign that outlines the benefits and value of taking professional advice.
"The FSA has regularly emphasised its statutory objective of promoting public understanding of the financial system," said Positive Solutions chief executive Jim Reeve.
"The RDR proposals impose profound changes on the market that could leave consumers confused and sceptical unless the time is taken to explain why they are necessary and beneficial."
He said that Positive Solutions welcomed the clear split between "independent" and "restricted" advice but said the FSA will need to work in partnership with advisers on a range of major issues such as changes to the way clients pay for advice.
"Advisers are facing a maelstrom of new rules, including the need to make fundamental changes to the way clients pay for advice by 2012 - in that the payment of commission by providers will be banned," said Jim Reeve.
"From experience we know that it can take up to five years for an independent financial advice firm to change their charging model. It can't be rushed and requires effective and regular dialogue with clients so that they understand and support the change. Clients must understand the service and advice offered by their IFA.
"Independent financial advisers have repeatedly been shown to deliver by far the most trusted form of financial advice, but there is a clear risk some will struggle unless the FSA creates a demand by informing and educating consumers about how advisers add value and why they are being asked to pay a fee.
"This is something that can't wait until 2012 - IFAs need to start remodelling their businesses now to meet the deadline so the campaign needs to swing into action quickly too."
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The UK's largest National IFA said the shake-up of the advice market outlined in the Retail Distribution Review needs to be accompanied by an effective FSA education campaign that outlines the benefits and value of taking professional advice.
"The FSA has regularly emphasised its statutory objective of promoting public understanding of the financial system," said Positive Solutions chief executive Jim Reeve.
"The RDR proposals impose profound changes on the market that could leave consumers confused and sceptical unless the time is taken to explain why they are necessary and beneficial."
He said that Positive Solutions welcomed the clear split between "independent" and "restricted" advice but said the FSA will need to work in partnership with advisers on a range of major issues such as changes to the way clients pay for advice.
"Advisers are facing a maelstrom of new rules, including the need to make fundamental changes to the way clients pay for advice by 2012 - in that the payment of commission by providers will be banned," said Jim Reeve.
"From experience we know that it can take up to five years for an independent financial advice firm to change their charging model. It can't be rushed and requires effective and regular dialogue with clients so that they understand and support the change. Clients must understand the service and advice offered by their IFA.
"Independent financial advisers have repeatedly been shown to deliver by far the most trusted form of financial advice, but there is a clear risk some will struggle unless the FSA creates a demand by informing and educating consumers about how advisers add value and why they are being asked to pay a fee.
"This is something that can't wait until 2012 - IFAs need to start remodelling their businesses now to meet the deadline so the campaign needs to swing into action quickly too."