Garry Heath, former director general of the IFA Association, will lead the new body, to be called Libertatem, which will target both independent and restricted advisers in the UK, specifically those directly authorised by the FCA.
Heath believes the industry needs to play a bigger role in the formation of new regulations, especially as they affect fees and commissions, to ensure it thrives.
“Markets should make decisions about how people are paid, not regulators,” Heath said after the launch.
At the launch of the new body on 15 May, Heath said: “At a time when individual responsibility for our own financial well-being has grown, pension freedoms have been introduced, and the protection and investment gap is increasing, the role of advice, and of the adviser, is more important than ever.”
“Markets should make decisions about how people are paid, not regulators,”
While welcoming regulatory reforms like the Retail Distribution Review (RDR), which led to a movement way from a commission-based remuneration to a fee-based system, Heath said the impact of the changes had been a drop in the number of advisers and therefore a loss in the access to advice for many consumers.
Consumers lose out
Heath’s own research has found that as many as 15.8 million consumers may have lost access to advice as a result of RDR. He has estimated that the removal of trail commissions in 2016 could create a further loss of advisers in the industry of between 20% – 40%.
“Now we have a majority Conservative Government; we have a golden opportunity to return accountability to regulation, to cut its costs and its intrusiveness and to ensure that the maximum number of advisers are available to the broadest section of society, Heath said the launch of the new body.
“The Government expended much of its election rhetoric on deregulation. It is now time for rhetoric to become action and we believe a stronger, clearer and broader representation of advisers is needed.”