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&#39Govt and regulator have new attitude to independent advice&#39

The Government and the regulator are changing their attitude to independent final advice, according to Aifa director general Paul Smee.

Speaking at the conference, Smee said 18 months ago the focus was on ways to effectively sidestep advice with tools such as decision trees.

He said: “The mindset is changing because of a different political imperative to get people saving.”

He argues there is now a realisation that advice is needed to achieve this objective.

Smee pointed to the findings of the Oliver Wyman & Co report which stated over a third of people would not even consider saving without advice. He told delegates that Ron Sandler has an open mind and a robust approach and the argument has moved on from fees commission to how to demonstrate the value of advice.

Smee believes Sandler was surprised at the level of regulation on IFAs and may recommend the conduct of business regime be thinned out.

He placed the responsibility on IFAs to get people to understand what they do to deserve their remuneration, saying they should spell out to clients why advice is value for money.

Smee offered reassurance to IFAs, saying the FSA wants to move away from a blame culture and encourage its team to behave in a different way after N2.

But he also warned the process must not become lawyerdominated at the expense of substance. He also emphasised that the regulator is now accountable to Parliament directly because the new legislation has come into force.


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