The financial services profession, advising millions of Britons on their pensions and investments, will be seeing major changes in the next few years.

With the Financial Services Authority (FSA) implementing the Retail Distribution Review (RDR) on the January 1, 2013, many financial advisers and their clients will have to rethink their position after this date.

What is coming will have a significant effect on the profession as well as changing the status quo for investors. It has been predicted anything from 10 to 50 per cent of existing firms of independent financial advisers may cease to exist as a result of the new regulations.

In one important respect, the new legislation can only benefit our profession as it will mean a new minimum level of qualification for all advisers handling client’s money. Like accountants and lawyers, they will have to demonstrate their knowledge and competence before they are able to suggest where money is placed.

Newcomers to the profession in the past couple of years have taken exams that meet the new qualification standards. But the average age of a financial adviser is over 50 with many being in their job for some 20 to 30 years, most will have to complete exams should they want to continue providing advice post 2012.

It will also be clearer which advisers provide a truly independent service advising on products from the whole of the market and those that provide restricted advice on products from only a limited number of providers.

Crucially the way financial advisers are remunerated for their advice will also be changing. Commission as we know it will be banned from 2013 as advisers will no longer be able to be paid commission by product providers and will be remunerated by adviser fees. Historically advisers have earned their money from commission.

Over recent years, commission has been reduced as consumers have become more and more aware of the value they are getting from their advisers and from the products they are recommending. Although high levels of commission paid to advisers are generally a thing of the past, this method still provides the most popular way of paying for financial advice.

Treasure Select Committee chairman Andrew Tyrie has said that the plan to ban independent financial advisers from charging commission on their products from January 1 2013, and the higher qualifications “risk putting large numbers of experienced financial advisers out of business”.