Advisers say the FCA and Government have missed an opportunity to make truly radical changes in their joint review of the advice market.
Earlier today the long-awaited Financial Advice Market Review was published with recommendations including amending the definition of advice and allowing consumers to access their pension pot early to pay for the cost of advice.
But advisers have been left disappointed.
Informed Choice executive director Nick Bamford says: “Does this change anything? Changing the definition of advice, maybe reviewing how the FSCS works and using your pension to pay for your advice. Am I missing something?
“Everytime there’s a chance to do something radical and really shake up how people do things it is missed. We want something radical, this is a consultation basically saying nothing.
“The bit that really irritates me is they say they are reviewing the FSCS but we are going to get our levies and we’ll be paying tens of thousands and I bet we’ll still be having this conversation in March 2017.”
In addition, the FAMR flatly rejected the idea of a fixed or variable long-stop after finding “relatively few complaints” relate to advice given 15 years ago.
Rowley Turton director Scott Gallacher says: “I consider this somewhat twisted as by the same logic the FCA are saying that if advisers only had a higher number of complaints over 15 years old then they would have considered the long stop appropriate. It’s the classic Catch 22 that we always seem to be in.
“The additional part of the FCA’s argument against the long stop for IFAs is the long-term nature of some financial products, but are these any more long term than other professional services such as wills, medical, or even architecture?”
One of the headline recommendations is expanding the current model of adviser charging that restricts money taken out of a pension pot being used for advice on broader areas.
But Wingate Financial Planning director Alistair Cunningham thinks this leaves the system open to abuse.
He says: “I like the way the system works presently because it is less open to abuse. If I tell a client don’t worry I’ll take the fee for this bit of work out of your pension over here that doesn’t feel right. It removes the link between the advice you are giving and the fees you are charging.
“I have no issue with the current model of adviser charging where each pot picks up its own tab.”
Highclere Financial Services senior partner Alan Lakey adds the regulator’s focus is wrong.
He says: “The most obvious thing that FAMR misses is that they still don’t get the fact that the more people advisers talk to, the more products are purchased.
“And the more advisers are able to speak to clients rather than dealing with paperwork the better. But it’s the horrible compliance and regulation aspects that inhibit us, and this does nothing to address that.”