Financial Conduct Authority (FCA) chief executive Martin Wheatley has defended the retail distribution review (RDR) under questioning from the Treasury Select Committee (TSC) pointing out that there are more financial advisers in the industry than there were this time last year.
Giving evidence to the committee this morning, Wheatley said that there was a ‘big growth’ in financial adviser numbers and that the FCA was seeing a lot of innovation with many new models being formed.
Wheatley (pictured) said: ‘It’s much more transparent, consumers are much better served now… it’s a professionalised industry and there are more advisers today than last year.
‘Banks pulled out because they found that they could not give cost effective advice at those levels… they failed but other people are finding a way to do it.’
According to FCA statistics published in January, the number of financial advisers, not including bank advisers, increased from 20,453 on 31 December 2012 to 21,881 on 10 January 2014.
However, adviser numbers have fallen 1,906 since the run-up to the RDR. An estimate of adviser numbers complied by RS Consulting for the regulator said there were 23,787 financial advisers in the summer of 2012.
The regulator's most recent figures showed that the total number of advisers (which includes financial advisers, bank advisers, stockbrokers and discretionary fund managers) increased from 31,132 on 31 December 2012 to 31,220. However in the bank and building society sector, numbers fell by 23% from August 2013 to January 2014, from 4,604 to 3,556.
While overall numbers increased over 12 months, numbers were still down from the summer of 2012 when there were 35,073 individuals giving advice.
The TSC also grilled Wheatley over consumers’ confusion over advised and non-advised services.
Wheatley said there was a narrow line between the two and that consumers, could in some cases, be under the impression they had received advice from an execution-only service.
He said the FCA needed to provide more clarity in this area and would launch a consultation on the subject by the end of the first quarter of this year.