Purpose – Against the backdrop of the Financial Services Authority's Retail Distribution Review, this study aims to present an assessment of the potential development of a UK personal financial advising profession. The development of a profession dedicated to providing financial advice is critically discussed by assessing a range of regulatory and industry views. Design/methodology/approach – The study indicates both a critical literature review and survey of retail financial services planning advisors. The critical literature review considers the market failures which surround the provision of financial planning advice in the UK. A survey of professionally qualified personal financial planning advisers ascertains perceptions of developments to the current regulatory framework to accommodate a more professionally based system of financial advice. Findings – It is reported that a conflict between the current regulatory system and the traditional liberal model of the professions exist. This conflict inhibits the development of a financial services advising profession. Survey evidence collected from professionally qualified financial planning advisors bears out this perspective. Research limitations/implications – Two key research implications emerge from this study. First, the development of a professional model of financial planning advising appears to be inhibited by the current regulatory system. Secondly, current regulation of financial services sales through a market mechanism appears to limit access to financial planning advice. Practical implications – The study raises two key practical implications. First, the current system of regulating financial sales, appears to exclude a substantial segment of the population from access to professional financial planning services. Secondly, the development of a profession and increasing professional behaviour in retail financial services sales conflicts with the current model of regulation. Originality/value – This research paper both reviews the wider arguments surrounding the regulation of retail financial services sales and forwards new evidence as to the attitudes of professionally qualified financial advisors towards regulatory change. This has importance in clarifying a number of the key policy concerns in the regulation of financial services sales.
Journal of Financial Regulation and Compliance – Emerald Publishing
Published: May 9, 2008
Keywords: Financial services planning; Regulation; United Kingdom