The UK financial regulator says it is looking at the issue of people being no longer able to get access to advice in the wake of tougher regulations brought about by the Retail Distribution Review, media reports said.

The chairman of the Financial Conduct Authority, John Griffith-Jones, said the watchdog is monitoring the issue “extremely closely” and recognises industry concerns over its impact. He was speaking at a conference held by the Wealth Management Association, which has re-branded from its previous name, the Association of Private Client Investment Managers and Stockbrokers.

The issue of clients “orphaned” by the RDR is one that this publication, among others, has flagged for some time. When WealthBriefing interviewed the FCA over a month ago , it was asked about what it thought of any advice gap. As regulatory costs mount, some firms, such as HSBC and AXA in the UK have cut some of their advisory channels.

Arguably, such cuts are, other things being equal, inevitable when a regulator imposes tougher controls on a sector. The RDR, which took effect at the start of 2013, outlaws trail commission payments to advisors and imposes higher standards of professional training on the wealth advisory industry. Ahead of the RDR’s introduction, some industry figures said as many as 20 per cent of UK independent financial advisors will disappear; however, recent FCA data suggests that this has not happened, although re-registration of advisors may have skewed the data. One advisor to IFAs, Brian Spence, recently told this publication about his fears.

“Clearly there has been a concern of the impact even if the nature of wealth management revenue streams has had slightly less impact than other areas of the industry. I would argue that what we have now is very clearly an improvement over what we had before,” Griffith-Jones was quoted as saying.

“Yes, there may be side effects or unintended consequences and over the coming months we at the FCA will monitor developments in the market extremely closely. In particular we are alert to the advice gap issue and actually very interested to see where you, as part of a very competitive market place, go for new solutions that might meet the advice gap customer needs,” he is reported to have said.

As reported previously, the FCA is also reviewing the sector of execution-only platforms that are seen as becoming more popular as advisory channels of wealth management become more expensive due to regulatory and other costs.