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ABI demands regulatory clarity on advice and non-advice


The Association of British Insurers has asked the FCA for urgent clarity on the boundary between advice and non-advice.

In a speech at the JP Morgan European Insurance Conference yesterday, ABI director general Huw Evans said many firms would like to offer customers help that goes beyond the Government’s Pension Wise guidance service.

He said: “But for innovation in the market to happen, we need the FCA to re-examine whether the current distinction between full advice and provision of information offers the optimal solution for customers.

“We don’t accept this is a medium-term issue, it is a now issue and it requires leadership from our regulators if it is to be resolved.”

Evans said the regulator must take the lead on the issue “given the consequences for providers and their customers if they were to experiment in ways that were subsequently challenged by regulators or the courts”.

Also in the speech, Evans said insurers need to be more “interactive and responsive” in order to engage consumers, and must fight the regulator to be able to do so.

He said: “The lack of excitement which is always likely to accompany the purchase of an insurance or savings product has to be compensated for by an experience as user-friendly as any available commercial transaction and we have to be prepared to fight tooth and nail with regulators where necessary to be able to achieve this.”

Evans added: “Insurance and savings are products built on trust – so we always have to be prepared to go the extra mile to demonstrate good faith, not just the letter of regulatory practice.”



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There are 6 comments at the moment, we would love to hear your opinion too.

  1. I wouldn’t have thought this is rocket science.

    EG. I suggest you need life assurance – Generic – non regulated
    I suggest you need £100k life cover and L&G is good – regulated and NOT generic.


    You may wish to consider amalgamating your DC pension pots – generic non-regulated.

    I suggest to amalgamate all your DC pensions with Standard Life – Regulated NOT generic.

    This apparent agonising by the ABI seems to boil down to the usual failings of their member employees – poor training. I can’t see it as a regulatory issue which seems pretty clear to me.

  2. Peter Hamilton 3rd June 2015 at 11:32 am

    I agree with Harry. The distinction is clear. The difficulty is trying to dress up advice as something else not amounting to advice: as the provision of information or of generic advice.

  3. What certain insurers are trying to lobby for is to “guide” a consumer through a process that results in the funds being transfered to them but without taking responsibility for the suitability of the outcome, essentially an opt out for them that allows them to treat guidance as execution only. This would be a retrograde step, unwind much of the increased standards achieve via RDR and establish a lower level of responsibility/consumer protection for business areanged directly with a provider.

    We now have a well defined suitability process around which an increasing number of firms are creating low cost advice services, life offices could do this too but are seeking a short cut. It is really important the FCA applies the same high standard regardless of who gives the advice. As I see it the agenda is moving towards “if you guide a consumer to an outcome expect to take responsibility for it” this already applies to advisers and if consumers are to be protected should apply to all channels.

  4. I love that phrase Ian, “If you guide a consumer to an outcome expect to take responsibility for it.” Would love the FCA to just say that.

  5. Taking Ian’s comments on guidance to the next logical conclusion, that would mean that anyone using Pensionwise or CAB et al should also be classed as being guided to an outcome. Are you seriously suggesting this is where we want to go next?
    No one provider can always have the best product and no one can seriously suggest that one provider tells a customer they should take their business elsewhere “because I know we don’t have the best on the market for this product” (generic). Eventually the insurers will implode and that will hardly be any good for millions of people. They are businesses and they are there to make money from their range of products. Of course they should be able to provide their existing customer guidance that will lead them to stay on as a customer. For the vast majority of people who don’t want advice or can’t afford advice its what they should do. Bring back the “best advice” rule for providers “guiding” their customer. i.e. Provide the best end product from the suite you have available. It really wasn’t complicated back in the day, but regulators have just made it more and more complex by adding all sorts of rules over the years. You only need to look at the FCA book of rules. 10000 pages???? J C almighty give me a break. If a customer of any given provider wants to much wider than just staying with their existing company then they need to go to an IFA/Restricted WoM adviser. For everyone else the chances are that they will do “alright” with whoever they are currently with and that should be good enough. That is a fact and for some of the more procrastinators on here, the sooner you realise that, the better. Unlike us they are not able to be all things for all people they deal with. The industry is now regulated to the hilt and does not need any more additions trying to find utopia. By definition it cannot exist

  6. @Peter Hamilton

    Genuinely flattered that an expert such as you agrees with me. Rather made my day!

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