The Association of British Insurers has raised concerns providers may not be able to offer simplified advice in time for next April due to a lack of clarity from the FCA.
ABI director of regulation Hugh Savill says the trade body’s members are keen to develop online “mass market” simplified advice offerings.
But he says it is not yet commercially viable for firms to do so following the FCA’s simplified advice consultation paper, published in July.
The consultation – which aimed to clarify the boundaries between advice, non-advice and simplified advice and to give firms the certainty to develop new models – closed last week.
Savill says: “Our members say this still does not make simplified advice a commercial proposition. There are a number of reasons for this, including concerns over future liabilities.
“Setting up an automated simplified advice offering means doing a cut-down version of the due diligence for full advice and that is quite a vulnerable position to be in if things go wrong.”
He adds there is a “frustration” among members that the FCA has not made more progress, particularly given the pressing timetable of the Budget reforms.
He says: “Our members are all looking at the changes taking effect in April and hoping as much of the FCA’s simplified advice work as possible will be ready for then. But that means working to a very tight timetable.”
Savill says the ABI is also looking at whether it could develop a “generic benchmark” for simplified advice on behalf of its members.
He says: “This may be particularly helpful for our smaller members and could involve setting out which issues the process needs to look at for customers at a certain lifetime point.”
The trade body also highlights concerns over the impact of the customer’s perception of whether they have received advice, the treatment of complaints by the Financial Ombudsman Service and the collection of information on customers’ existing investments.