Financial advice shake-up comes into force The Financial Services Authority (FSA), which is introducing the new rules, said they will ensure that the advice being given is in the best interests of the customer and not driven by how much commission advisers could make. It believes the rules will improve the quality of advice and cut the chances of mis-selling, as well as generally building trust in advisers. The changes will also raise the minimum professional standards for financial advisers. They will need to subscribe to a code of ethics, carry out at least 35 hours of continuing professional development a year and hold a Statement of Professional Standing (SPS) from an accredited body. Linda Woodall, head of investment intermediaries at the FSA, said: "These changes are about making the cost of advice clearer. Where else would you buy something without knowing in advance how much it costs? Experts have predicted that the costs of advice to people under the changes could vary widely. A recent survey suggested that the potential cost to a customer of an initial financial review could be almost £500. However, concerns have been raised that many consumers are still not fully aware how they will be affected. A survey of financial advisers by Defaqto last month found that a third did not feel their clients understood how they would be paying for their advice after the changes. Business advisory firm Deloitte recently estimated that up to five and a half million people could fall into an "advice gap" - meaning they will be unable or unwilling to pay the charges involved. Deloitte suggested that many people are likely to respond negatively to explicit charges for advice which had previously appeared to be free and they will do more to take matters into their own hands, such as doing their own internet research. It found that 87pc of customers who bought a savings or investment product using a bank adviser in the past three years had assumed the advice process was free, with the product provider stumping up the cost. The new rules also mean that advisers will have to clearly describe their services as "independent" or "restricted," to make it easier for customers to see which areas they can advise on and which are not covered by their services. Advisers providing an independent service will be able to consider a range of products from firms across the market. But those offering restricted advice will offer a more limited service and can only recommend certain products or providers, meaning they might only offer deals from one company, or just one type of product. Ms Woodall added: "Customers will now know how much advice is costing them, the service that they are receiving and be reassured that their adviser is qualified. The changes will improve customer confidence - we want people to feel that they are getting a service from their financial adviser that is relevant to their circumstances and in their best interests. Financial institutions have already been adapting their businesses in anticipation of the new rules. Since November, Lloyds Banking Group has only been offering customers with at least £100,000 to invest face-to-face advice through the group's private banking services. Around 1,000 advisers in locations across the country were understood to be affected by Lloyds' move, although the banking giant said there would not be any compulsory redundancies. In June, the Royal Bank of Scotland (RBS) said it was cutting around 600 jobs from its financial planning service across the UK, while creating 350 new roles in preparation for the changes.