The Heath Report, written by Garry Heath, a former director general of The IFA Association, suggests 3.5 million consumers have been “divorced” from advice by the “interference” of a post-RDR FCA.
The report comes two years to the month in which RDR took effect on 31 December 2012.
Meanwhile, the Adviser Benchmark Survey by Engage Insight claims the RDR is being undermined by advisers championing “commission- style” back-end product-based fee charges. Experts are similarly opposed over the progress being made in the adoption of a fee-based remuneration model.
Keith Churchouse, director at Chapters Financial, said the FCA has “gone too far” in its approach, which has led to the “inevitable” loss of business for many advisers.
“The regulator is not concerned about the loss of smaller companies who cannot afford to operate under the new model, because they think it is for the better,” he said.
He added he would like to see industry trade bodies such as the Association of Professional Financial Advisers and The Personal Finance Service work together to represent advisers.
“They seem to be pulling in different directions and diluting their message,” he said. “We need one big voice rather than lots of small voices, I am not convinced they are all being heard.”
Anthony Villis, partner at First Wealth, said the FCA is failing to understand the advice gap “is a real issue and needs to be addressed”.
“The whole experience is about value for money, and ultimately the solution is a technology-based, non-advised process,” he said, adding that the regulator must improve its definitions of advised and non-advised sales for this to work.
“Advisers need a clear definition so they can go and build a business model to cater for client demand and help solve the advice gap.”
Managing director at Killik Chartered Financial Planners, Sarah Lord, said the FCA were “wrong” to entirely ban commission, and should have driven further transparency and disclosure.
“Commission is not as evil as it has been made out to be,” she said.
However, she added that advisers have become more “articulated and comfortable” with the RDR since it was introduced, which has in turn encouraged customers.
Dean Mullaly, senior partner at Mark Dean Wealth Management, said advisers still need to “think differently” about themselves and avoid focusing on the sale of products.
“Firms need to offer more than just advice, they need to offer a choice of avenues for clients to use.”
He added, while “all clients” are willing to pay fees for advice, many remain unconvinced the service will repay the amount of fee paid.
“The adviser needs to keep reminding the client of the value they add.”