A consumer watchdog has expressed serious concerns over the lack of transparency about advice and investment costs following an FCA report.
The regulator this week released the findings of work carried out into how the sector was performing two years on from RDR.
The Financial Services Consumer Panel believes the research has again highlighted problems that are in need of urgent action.
The regulator said there had been "a material improvement in firms' disclosure of their services and charges, suggesting that the sector responded positively to the findings" of a previous review.
But it added: "We remain concerned that a significant proportion of firms are still failing to correctly disclose the total cost of on-going services in cash terms, or not providing an approximation of how long services may take when quoting hourly rates."
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The FCA found 35% of firms did not disclose the total adviser charge for their on-going services in cash terms relevant to the individual client - compared to 41% in its previous review. This was one of the main failings in both of the previous reports.
In the wealth management sector the FCA found "too many firms operating on a percentage charging basis are failing to provide examples in cash terms in their generic charging structures" - typically in their 'rate cards'.
Consumer panel chair Sue Lewis said: "We remain concerned about cost transparency. There are two issues. As the FCA has repeatedly found, it is still difficult for consumers to get a straightforward quote for the cost of financial advice in some circumstances, and it is not always clear to consumers what service they are getting for recurring charges. This is improving but more needs to be done.
"The more serious problem is in the underlying investment market. Advisers cannot do their job properly if they cannot tell their customers the true costs of investments because these costs are hidden, or unknown. Without transparency and the means to compare the costs of different investments, a competitive market cannot exist."
The panel welcomed the conclusion by the FCA that the 'independent' and 'restricted' labels for advisers were a source of confusion among consumers.
Ms Lewis added she was encouraged by the fact the FCA also reported that financial advisers were offering investors an "increasingly professional service tailored to their individual needs" as a result of RDR.


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