The UK regulator has come out to reassure clients that its Retail Distribution Review package of reforms will not mean that they end up paying more to receive investment advice.

There have been concerns that the RDR will, by driving up the qualification requirements on advisors, force some people and businesses out of the sector, squeezing the supply of potential IFA advice and send costs higher.

To reassure clients in an update to consumers on its website, the Financial Services Authority clarified the advantages of receiving fee-based, rather than commission-based advice.

“The price you currently pay for advice is often hidden within the charges of the product that you buy, and that price is currently set by the product provider, not you – the customer. These changes are not altering how much the advice should cost, but rather enabling you to agree how much the advisor gets paid rather than that decision being taken for you by a product provider,” the statement said.

The regulator went on to explain that pre-agreed fee structures does not necessarily mean paying up front for advice. “You could instead agree with the advisor to have their fee taken from your investments; the difference in future is that you will agree with your advisor, in advance, how much you will pay for their advice,” the FSA said.

The update also highlighted the RDR’s aim of driving up standards of professionalism through the introduction of new mandatory qualification requirements. Once the RDR is implemented at the start of 2013 advisors will have to be qualified at QCA Level 4, rather than the current Level 3 minimum.