Astley-based IFA Mike Jeacock recently hosted a meeting of local independent financial advisors (IFAs), whose livelihoods are threatened by proposed Financial Services Authority (FSA) measures. The meeting was called so that Harriett Baldwin and fellow Worcestershire based Conservative Parliamentary Candidates could meet with, and listen to, the concerns of local IFAs.

IFAs provide independent financial advice to individuals on matters such as savings, pensions, mortgages, tax planning and other personal financial issues. Much of their income comes from commission on the products they sell. In many cases, some IFAs have decades of experience in this complicated industry.

However, the FSA is conducting a consultation known as the Retail Distribution Review (RDR) which contains proposals that will affect the way IFAs do business. In particular, two proposals will seriously undermine the ability of IFAs to continue: a change in the way they claim commissions for products sold; and a requirement to take degree level exams to continue to practice. According to the FSA's own consultation paper; "Incremental compliance costs are estimated to be £430 million one-off and £40 million a year thereafter...There may also be short-term costs arising from market exits by Independent Financial Advisers and increases in product prices. In the longer term, cross-subsidies between consumers may be unwound: this may be a cost for smaller investors..."

Harriett Baldwin, who was until recently regulated by the FSA since its inception said: "Once again, the FSA is using a sledgehammer to crack a nut and many small local IFAs could find themselves out of business because they have not passed a new exam requiring up to 500 hours of study. When the FSA was first set up, experienced investment professionals were allowed to be "grandfathered" in as regulated persons without taking exams. I shall be urging the FSA to do the same for experienced IFAs with unblemished regulatory records. In addition, I see no reason why consumers should not be able to make up their own minds about commissions. So long as these are transparent to the buyer, why not allow consumers to pay in this way for financial advice? The last thing savers need right now are fewer IFAs and half a billion pounds of extra regulatory costs."

Harriett Baldwin, together with Worcestershire based Conservative PPCs Mark Garnier and Robin Walker, pledged her support to submit a joint response to the FSA consultation and to ensure that the Conservative front bench team and the government is fully aware of the views of the IFA community.