On 1 January 2013 the „Retail Distribution Review Act“ came into effect. One year later the British consumer organisation Which? presented the results of an investigation into the implementation of the RDR. For this investigation Which? called 30 independent financial advisers (IFAs) asking how much advice would cost on investing a £60,000 inheritance. Only 14 of them stated their fees over the phone. Even 70% of this group failed to list information about their prices online. Many advisers explained that their charging system was much easier to explain face-to-face, and some suggested it was impossible to establish costs without more detail. Nevertheless, a small minority was willing to indicate how much the service would cost without engaging in lengthy meetings.
Based on these results Which? calls for transparent pricing within the financial sector. The Financial Conduct Authority (FCA) agreed, that more needed to be done to achieve transparent pricing in the industry. It has been one year since the „Retail Distribution Review Act“ came into force. It requires all financial advisory companies to clearly set out the charges the client will have to pay and agree them prior to providing any advice. A Which?-spokesman said: “We want to see all financial advisers publishing their full menu of charges online, and if this can't be achieved by industry-led initiatives, we want to see the FCA regulating advisers to compel them to do it.”
Further information: http://www.which.co.uk/news/2014/01/many-financial-advisers-tight-lipped-over-fees-351668/