New regime, new choice for those seeking financial advice

New rules for financial advisors coming into force today will mean more choice for consumers.

15:34 01 December 2004

New rules for financial advisors coming into force today will mean more choice for consumers, according to the Financial Services Authority (FSA).

The government's financial services regulator believes that the new regime will provide consumers with more information and boost competition in the sector.

From today financial advisors will be able to provide advice on a single product, a selection of products or the whole market.

At the moment, advice is restricted to either a single product or the whole market.

"At the moment a large number of consumers receive advice from their high street bank or building society, and in those circumstances today there is really only one choice of a range of products," the FSA's Dan Waters told the BBC.

"In future, having talked to the firms to see what plans are shaping up, it is clear that there is going to be much more choice in those situations than there is now."

The reforms will also require advisors to provide more information on their products and charges.

IFA Promotion has produced a dedicated website to help explain the implications of the changes.

"From now on consumers will receive clearer up-front advice .. . however, introducing a new breed of adviser is bound to cause confusion, and we're urging people to study the types of advice available so that they can make an informed decision," said David Elms, chief executive of IFA Promotion.