General Insurance Article - ABI warns on potential consumer advice gap

 The changes under the Retail Distribution Review(RDR) are now effective, and the Association of British Insurers(ABI) has stressed that insurers are well prepared to implement the reforms that will increase transparency for consumers buying investment products, such as pensions.

 The insurance industry has always supported the changes which ban financial advisers from receiving commission from providers, like insurance companies, require them to give customers an upfront quote for their service and also set higher adviser qualification standards.

 Maggie Craig, director of Financial Conduct Regulation, ABI comments “The changes to financial advice are a major step in the right direction to give people more clarity and transparency around where their money is going and increase confidence that they are getting good advice from professional advisers. Insurers have done a lot of work to prepare for the changes and the industry is committed to making the reforms a success.

 Financial advice plays a crucial role in helping people make good financial decisions, so we remain concerned that an unintended consequence of the reforms is that the existing consumer advice gap may widen. The regulator must keep this front of mind and be prepared to work with the industry to improve consumer access to appropriate financial advice.”