The Financial Services Authority (FSA) has shown its commitment to the changes outlined in the retail distribution review (RDR) by promoting the regulatory overhaul to consumers.
The regulator has set up a page on its website entitled Changes to the way you receive advice about investment which explains independent advisers' role, adviser charging and the move to increase qualification levels.
It states: ‘The way you receive investment advice from financial advisers is changing. We have been working with firms, advisers, consumer groups and industry experts to improve how investment products and services are recommended to potential investors.’
The FSA explains the responsibility of independent advisers, saying they ‘must consider all relevant options…and do so free from any restrictions (such as working with only a select group of product providers) or bias (such as being paid by commission)’.
Although it does not use the phrase ‘adviser charging’ the regulator details on the site that the RDR aims to ensure ‘advisers tell you how much their services cost and agree with you how much you will pay’.
It stresses the point that ‘advice is not currently free’ and that advice will not cost consumers more as ‘the price you currently pay for advice is often hidden within the charges of the product that you buy, that price is currently set by the product provider, not you – the customer’.
It goes on to say: ‘You will receive advice from competent, trained professional who subscribe to a code of ethics ensuring they act with integrity and treat their customers fairly.’
The regulator does not spell out explicitly what level of qualifications advisers will have in 2013 but said: ‘Every adviser will have to meet new consistent professional standards. We are introducing an overarching code of ethics for investment advisers, ensuring they act with integrity and treat you fairly.
‘We have modernised and raised the level of qualifications advisers must have, and improved how they keep their knowledge up-to-date.’