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Consumers may find it difficult to get 'free' financial advice - Turn2us

Financial Services Authority website (link opens in a new window)Consumers could find it difficult to get 'free' advice about money matters when new rules on pricing come into effect at the end of the year, consumer bodies and financial services have warned - in an article published in The Guardian on 11 August.

The changes follow a Retail Distribution Review by the Financial Services Authority and come into effect on 31 December. They are designed to make the cost of financial advice more transparent and help consumers have a better understanding of what kind of service they are being offered.

One of the main aims of the new rules is to stop the payment of commission on the sale of investments and pensions, which has subsidised the advice offered by many financial providers, including some large banks. Although they seemed to act on a free basis for clients, charges were then deducted from investors funds each year, having a huge impact on eventual returns.

Customers wanting to take advice from January 2013 onwards will be charged a separate and transparent fee. However, critics say these changes will make it harder for mass-market financial sales forces to offer advice to people with moderate savings.  Some high street banks have already decided to focus their services on wealthier consumers.

Customers who may previously have been invited in for a free review of their finances will also have to be proactive in seeking advice – either from an independent firm, or one of the few banks and building societies who have chosen to operate under the new rules.

Read the Financial Services Authority information on the Retail Distribution Review (link opens in a new window)

See the Turn2us information sheet on Getting Financial Advice

Source: Guardian news article (link opens in a new window)

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