The Government’s new Money Advice Service and the FSA’s forthcoming consultation on simplified advice have reignited debate about the misuse of the word “advice”.
We suggest that, in giving advice, you should be taking on responsibility for the advice you are giving yet a lengthy disclaimer on the MAS website stresses that it takes no legal responsibility for the service it is offering.
The MAS proudly states on its website that it has received a gold standard for the use of clear English. Yet this same website states the advice service does not offer regulated financial advice. Confused by this use of English? We expect many consumers will be.
In the context of the retail distribution review and the clarity that is needed on the types of advice that will be offered, the Government has done consumers a huge disservice in branding this industry-funded initiative the Money Advice Service.
Using the name Money Guidance Service would have given consumers a better understanding of what it has to offer compared to the different levels of regulated advice they can receive.
The FSA is to finally consult on introducing a simplified advice regime over the next few months.
As Aifa chairman Lord Deben points out in an interview in this week’s Money Marketing, the banks seem desperate to use the word “advice” as it would give their simplified offerings an air of independence that is not deserved.
Unhappy with the rigid and expensive requirements of the new restricted advice sector, many of the big banks and insurers are pinning their hopes on simplified advice.
We should welcome the clarity that this consultation will hopefully bring to this area. There is a need for a clear set of guidelines for how the financial services industry will interact with the Government’s proposed simplified products regime.
Making it easier for individuals and their families to gain access to basic protection cover, for example, would be a positive step.
But the FSA has a chance to make up for its failure to set in stone a clear differentiation between advice and sales as part of its RDR consultation by replacing the word advice with a more appropriate term.
Consumers need to be clear the adviser is on their side and is prepared to stand behind the advice offered.