Cotswolds MP Geoffrey Clifton-Brown spoke out in Parliament last night (Monday 29 November) on behalf of a number of Independent Financial Advisers (IFAs) who had contacted him recently.
A debate was held on the regulation of IFAs, specifically on proposals by the Financial Services Authority (FSA) that will have serious consequences for the provision of financial advice both in the Cotswolds and Nationwide.
The new regulations follow as a result of the Retail Distribution Review, which was launched back in 2006, and will require all IFAs to attain a new qualification by 31st December 2012, as well as replacing the existing commission payments with a fee-based model, along with a number of other measures.
It is estimated by the FSA themselves that up to 20% of the 29,000 IFAs currently in existence could leave the industry as a result. Other independent estimates have put the scale of loss at between 30% and 50%. The loss of thousands of IFAs will seriously affect the provision of financial advice to millions of people nationwide but will particularly affect those in rural areas, such as the Cotswolds, where many banks have closed their branches and who, as a result, already face reduced access to financial advice.
Commenting during the debate Mr Clifton-Brown stated, “I represent a rural area, and I know that banks have closed many of their branches in the high streets of my small market towns. If the IFAs are driven out as well, a lot of my poorer constituents will be left without any form of independent financial advice at all, at a time when the banks, if they are there at all, are offering a reduced service. “
Speaking after the debate the MP commented, “I hope that the FSA will listen carefully to what was said in today’s debate. IFA’s play a crucial role in providing vital financial advice to many people in the Cotswolds, and steps must not be taken which threaten this provision of services.”
“Asking people, many of whom have been in the business for decades, to take new qualifications seems entirely unnecessary. IFA’s accounted for just 2% of complaints to the Financial Ombudsman Service in 2010, compared to the banks at 61%. I cannot think of a single other professional body whose members would have to obtain a retraining qualification halfway through their careers and I strongly believe we need to have a rethink on this matter.”
Source: Geoffrey Clifton-Brown MP Cotswolds