A Change Will Do You Good, Says BNH

A major overhaul of the financial advice industry will ensure investors and businesses have access to clearly costed and expert advice, according to leading independent financial advisors Brunning Newman Houghton (BNH).

The reforms outlined by Financial Services Authority, the industry regulator, include the scrapping of commission-based payments for investment and pension advice from January 1, 2013, with all advice paid for by fees from there on. There is also a higher mandatory minimum professional qualification standard, and these changes have seen many financial advisors leave the profession, with more expected to follow.

Several high street banks and building societies have chosen not to adapt to the new business model. Barclays Bank has closed its advice arm, Barclays Financial Planning, while Royal Bank of Scotland and HSBC have announced a total of more than 1,000 redundancies collectively.

Under the reforms the minimum qualification to provide advice will be raised from an ‘O’ level or GCSE to the equivalent of a degree. This qualification issue has affected many independent financial advisors who have decided they cannot or will not qualify by the deadline and will reluctantly leave the profession.

David Brunning, Managing Director of BNH, based in Tunbridge Wells, said: “The FSA’s reforms will lead to an increase in the knowledge and professionalism of advisers and product providers, making the cost of advice clear and the businesses involved in financial advice more robust.

“The changes laid out in the Retail Distribution Reform will make what has often been seen as a complex process with hidden costs suddenly more easily accessible and transparent – a move which will undoubtedly help anyone in need of financial advice, from private investors to business leaders.

“The FSA is now championing what we at BNH have always believed in; providing truly independent, expert financial advice and support with a clear set of costs. We are extremely well-placed to continue this practice in the coming years.”

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