ABI slammed over simple advice support
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Advisers have attacked the Association of British Insurers’ call for the development of a simplified advice model, saying it would diminish the role of IFAs and confuse consumers.
The ABI published research last week carried out with over 2,500 people looking at their attitudes to financial advice and whether consumers were prepared to pay for it.
It found that over half of those polled were not prepared to pay for financial advice, with a third believing that whole of market independent advice would not cost more than £300 in total.
The ABI puts the cost of providing an independent advice service at an average of £670 to cover the up-front cost of advice associated with one product sale.
It says the research demonstrates the need for a simp- lified advice model.
ABI acting director of life and savings Helen White says: “For the RDR reforms to deliver good outcomes for consumers and the industry, we need both to convince sceptical consumers that full advice is worth paying for and also come up with a model of simplified advice for those consumers who cannot afford or do not need full financial advice.”
Advisers say simplified advice risks blurring the lines between full advice and any new offering.
Paladin Financial Services managing director Tim Purdon says: “I would think there is a bit of self-interest from the ABI there. It seems to me those who would wish to advocate simp- lified advice do not them- selves understand the value of independent advice.”
Baronworth Investment Services director Colin Jackson says: “You either give full advice or it is execution-only, there is no middle ground, and to suggest anything else is dangerous.”
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