Tenet calls on TSC to broaden RDR debate

Tenet has urged the Treasury Select Committee (TSC) to broaden the scope of its next RDR debate and says a root and branch review of regulation is “desperately needed”.

The IFA support group has called on the TSC to widen the RDR debate when it meets again this week beyond the narrow focus of qualifications and commission to examine the impact in terms of cost and market contraction.

"It is time to consider better solutions and outcomes from a consumer perspective rather than trying to perfect the current imperfect industry," says Tenet distribution & development director Keith Richards (pictured).

Tenet thinks whilst the regulator has been justified in considering the implications of adviser remuneration, it has placed little attention on the impact of rising costs and the unlimited amount of financial liability advisers carry indefinitely.

Richards adds the majority of IFAs have "had enough" of ineffective and intrusive regulation resulting in poorer consumer outcomes.

"A fundamental review of UK regulation is desperately required and we have to especially take into consideration the rules coming out of Europe, rather than keep pretending that we are simply a couple of years ahead and the rest will catch up with the UK eventually," he says.

Rather than trying to "perfect the current imperfect industry", Richards says it is time to consider better solutions and outcomes from a consumer perspective.

Tenet adds the industry has been in a continual state of contraction for the past two decades resulting in a significant number of job losses and billions of pounds spent on regulatory compliance and compensation.

"The UK financial services industry should be in a period of growth, given the significant need for strong financial planning, especially when taking into consideration the financial issues facing many UK consumers in future retirement," adds Richards.

"Growth would also create new jobs for the economy and generate more short term revenue for the Treasury, whilst tackling some of the longer term issues. It is therefore difficult to understand why the further cost impact and market contraction is seemingly being ignored."

Underlining the extent of the industry's contraction, Tenet says whereas there were around 450,000 advisers in 1987 today's number stands at around 25,000, the majority of whom are self-employed.

The group cites Barclays Bank's announcement of 1,000 adviser redundancies as an illustration of the flawed advice model.