The Government is being accused of undermining independent financial advice and misleading consumers by offering its own “back-door” advice.
Enraged IFAs warn that the Chancellor's plans for the Financial Services Authority to publish costs and charges league tables for savings, investment and pension products will lead to “misbuying” by confused consumers.
They say the league tables will be misleading because they are overly simplistic and they claim that consumers could confuse FSA tables with best-buy tables.
Some see the move as an attempt to bypass independent financial advice altogether, particularly when seen in conjunction with other initiatives such as the FSA's consumer helpline and guidebooks providing consumer information on financial products.
One senior life office source says: “What is the point of having IFAs any more when you can get all the information elsewhere?”
The FSA will issue a consultation paper in the summer on how to implement Chancellor Gordon Brown's proposal on league tables.
Burns-Anderson executive chairman Steve Kelland says: “It would lead to misbuying because it clouds the issue rather than going to an IFA to sort it out. The FSA is trying to bypass independent financial advice. It is not the job of the regulator to put out this sort of information.”
IFA Promotion chief executive Ann-Marie Martyn says: “You do not buy just on cost. Most products are complex in their underlying contents. You would not want someone to attempt brain surgery with a pamphlet and a helpline. I hope the public realise just because it is cheap it does not mean it is right. Is the Government trying to do away with financial advice full stop?”
Zurich IFA chief executive Jerry Grayburn says: “If there is any indication to consumers that league tables are a proxy for best buys, there will definitely be misbuys.”
But FSA spokeswoman Jackie Blyth says: “This will be a helpful tool. We are not suggesting that people will not need advice.
“The better the information people have, the better the decisions they can make with or without advisers.”