The RDR represents a bad deal for consumers, according to a former FSA consultant.
Richard Hobbs, managing director of Beachcroft Consulting and a former independent consultant for the regulator, says proposed changes in the relationship between advisers, providers and consumers will not work.
Hobbs says the RDR will not work for consumers, because it will put their relationship with their adviser under additional strain while asking them to pay ‘more' for the privilege.
Negotiation of charges, an overload of information and additional responsibilities for consumers are unlikely to make them warm to the RDR changes, Hobbs suggests.
"If we look at this new process of negotiating a charge with an adviser, a lot of people are going to feel uncomfortable with doing this," he says.
Studies suggest most consumers massively underestimate the costs incurred by professionals, such as IFAs, accounts and lawyers and Hobbs says this will make it difficult for consumers to begin negotiating how much they will pay for their advice.
In addition to having to negotiate their charges, consumers will also be faced with having to communicate with the provider over how they will pay their adviser, and will have to digest more complex information regarding the various costs involved in buying their financial product.
"Under the RDR, consumers have to do more for themselves with the perception of it costing them money to do so, and the FSA wants you to believe this will work for consumers," Hobbs adds.
Hobbs suggests the RDR may actually reduce consumer engagement with the financial services industry, by making the process of obtaining advice complex and unattractive from the consumer's perspective.
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