Banks sound warning on tough adviser proposals

The private banking industry has welcomed the publication of the latest update to the Retail Distribution Review (RDR).

According to the British Bankers’ Association (BBA), the proposals from the Financial Services Authority (FSA) that advisers must achieve stricter professional qualifications standards in future will be beneficial.

The group also said that the RDR’s aim of making it clearer to customers when their adviser is selling products on commission and when they are giving truly independent advice will help to deliver ’improved outcomes for consumers’.

However, the BBA’s analysis expressed concern that the changes could lead to a ’one size fits all’ system where only the wealthy are served.

BBA chief executive Angela Knight said: ’We support efforts to make sure customers know what they are getting and what they are paying for. We also believe people should know if advice is tied in to any one institution.

’But change must be effective and proportionate and must avoid imposing excessive costs for marginal or no consumer benefit.’

The RDR is scheduled to come into effect in 2012.ADNFCR-2318-ID-19238240-ADNFCR