Andrew Hagger: This review will act as a wake-up call to Britons and prove a boon to a host of innovative, online financial providers

Money Insider

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The Independent Online

The Retail Distribution Review comes into effect on 31 December and will change the way retail customers pay for financial advice.

Financial advisers will no longer be able to receive commissions from product providers for recommending retail investment products to customers. Instead, they will have to charge their customers for advice.

Recent research from the business advisory firm Deloitte predicts that these changes will affect many people in the UK, and could create 5.5m advice orphans – consumers who require financial advice but who are unable or unwilling to pay for it.

The research suggests that around a third of customers, particularly the less wealthy, could start doing their own financial planning, product research and administration to avoid paying for advisers.

This is not something that’s gone unnoticed and we are already seeing firms offering alternative low-cost online options for those unwilling to pay for financial advice.

A recent example of such innovation comes from, co-founded by Andrew Firth, pictured, which has just launched a low-cost pension-selection service, potentially an alternative to the high street IFA. Though many will argue there’s no substitute for an in-depth face-to-face financial review with an IFA, more cost-effective online solutions will appeal to cost-conscious consumers and will prove to be a growth area in the next six to 12 months.

Andrew Hagger is an independent personal finance analyst from

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