Advisers have generally benefited from the Retail Distribution Review (RDR) as their revenues have increased and they are more professional and better qualified, Financial Conduct Authority (FCA) chief executive Martin Wheatley has said.
Wheatley (pictured) said at a round table RDR update that recent research carried out by NMG Consulting showed adviser revenues were up by an average of 5% post-RDR.
Although adviser numbers dropped by about 11% over the last year, this affected mostly banks and building societies, not independent financial advisers, whose numbers had stayed fairly flat over the period, he said.
Wheatley claimed:"In terms of number of advisers the falls that we have seen are not in the IFA space, they are in the banks and building societies space.
"I think generally the IFAs would say that RDR has been a net benefit for them. They've certainly seen revenue increases."
Advisers also achieved an increase in their professional standards, which was an important part of what the RDR was about, he said.
The industry has gone from half of advisers being qualified to the post-RDR minimum of QCF Level 4 in 2011 to 97% being fully qualified to that level now, according to Wheatley.
But the Association of Professional Financial Advisers (APFA) warned last July that the FCA needed to make it easier for firms to do business in order for numbers to replenish and firms to flourish.
And Treasury Select Committee chairman Andrew Tyrie warned at APFA's annual dinner in November that excessive regulation was threatening to create the "stability of the graveyard", preventing firms from being innovative.
He concluded that there was now "possibly a considerable risk of consumer detriment" as a result of the RDR and a fall in overall adviser numbers.
Wheatley said the FCA was trying to forge a dialogue with the industry to make the market work effectively for firms and consumers alike, but that evaluating the effects of regulation can be difficult.
He said: "We obviously create a certain amount of structure but then the market has to work out within that how it best delivers service, how it makes its money.
"One of the things we are watching is how the markets are evolving and in a sense, pre-RDR, there was no particular impetus to create different charging models.
"What we need to understand is whether there are things within our structure that prevent that commercial development from happening. I think that has been quite unclear and difficult to know."
The FCA is still concerned about transparency in the advice space, especially in relation to charging and independence, Wheatley said.
Also the regulator will not reimburse advisers for previously 'overpaid' fees if the proposal to cut regulatory costs from next year comes into force.
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