WR Financial welcomes new FSA rules
A pensions expert and boss of a Tess Valley financial firm has welcomed changes in legislation to the way financial advisors are regulated.
Graham Laverick, Managing Director of Tees Valley-based WR Financial, believes the new rules which govern his industry, implemented by the Financial Services Authority, will help improve the service and transparency customers get from their financial advisors and prevent bad practice.
The new rules, which have come in through the FSA’s retail distribution review, mean advisory firms must explicitly disclose and separately charge clients for their services, meaning they can no longer be paid through a commission which the product provider would pass on to the customer by increasing the product price.
Independent financial advisors will no longer be able to take commission as a payment but must now instead transparently quote customers fees for the advice provided, either at an hourly rate or at a flat fee for all the services provided.
The changes have been put in place in an attempt to make the process easier to understand for customers, and help them to receive the correct advice for their situation.
Under the rules, firms must also make it clear if they are tied to one provider, or a limited number of providers, or if they are completely independent. A code of ethics and standards has also been introduced for financial advisors to adhere to.
Now, practising Independent financial advisers must hold at least QCF level 4 qualifications – which are equivalent to the first year of a degree course – if they are to offer financial advice in a bid to raise standards and increase consumer trust.
Graham said: “We wholeheartedly welcome this move by the FSA. It is extremely important that all aspects of financial products are transparent and easy for the customer to understand to prevent less scrupulous elements of the industry from pulling the wool over the eyes of consumers.
“Trust is the most important element of selling any financial product, which is why WR Financial has always directly quoted customers a price for the advice we give. It is great that there is now a level playing field for all financial advisors, and that customers will be able to transparently and openly see the best deal.
“The current economic climate means that selecting the right pensions and investments are more crucial than ever before, and this move to clean up the industry and increase consumer faith in financial services is most welcome.”
This was posted in Bdaily's Members' News section by Recognition PR Business Team .