Advisers anticipate 2013 will be as tough as previous years. Naomi Osinnowo finds out what one wish they'd make to bring about a happier New Year.
The only way is chartered
Barretts Financial Solutions
Managing director Kim Barrett believes next year most consumers will only take advice from chartered financial planners, despite many advisers "scraping through" to get their Level 4 Diploma.
The Financial Services Authority (FSA) having messed up the definition of ‘independent' and ‘restricted', and greater press coverage on the importance of adviser qualifications will fuel the shift, predicted the Personal Finance Society Fellow.
Advisers anticipate 2013 will be as tough as previous years.
To prevent advisers ending up in the shadow of the chartered title, Barrett said his one wish is "that the Retail Distribution Review (RDR) achieves its ultimate goal to drag the industry, kicking and screaming, into a more professional vocational and efficient age".
Better bank practices
Wingate Financial Planning
Director Alistair Cunningham expects numerous advisory firms that "feel they need to be independent" will switch to a restricted service after the RDR.
He argues "they lack the due diligence and expertise to be independent". But, for Cunningham, this does not put advisers at a disadvantage because "ultimately their clients don't need independent advice".
Cunningham believes that if all advisers operated a restricted service - by product type, not by market - clients would be adequately serviced.
The real threat comes from high street banks, which very often tell clients advice is free, said Cunningham. "I hope the RDR reduces some of the sharp practices by banks," he said.
Shropshire Independent Financial Services
Come next year "people will still not be able to distinguish between independent advice and restricted advice any better than they are able to now", says Rosemary Heaversedge, principal of the Shrewsbury-based firm.
She said there has always been a blur between the different adviser types and doubts the legislation change is going to bring any clarity.
Heaversedge said the FSA has "a lot to answer for", because it has failed to provide people with proper financial education.
"My one big wish [therefore] is that the FSA would concentrate on educating the consumer rather than the adviser," she said.
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