The Association of British Insurers says the FSA has rendered the simplified advice model unworkable and risks further widening the advice gap.
The FSA published its final guidance on simplified advice last week, which says simplified advice must meet the same requirements as full advice.
ABI director of financial conduct regulation Maggie Craig says: “Simplified advice was an industry effort to find a solution for consumers to afford advice after 2012, so we are disappointed by the guidance, which effectively makes the model unlikely to work in practice.”
In the final guidance, the FSA says it is not convinced consumers who want and need advice from next year will not be able to access it as those who cannot afford to pay for advice up front can pay over time through the product.
Zurich UK Life principal of government and industry affairs Matthew Connell says: “The FSA has gone some way in facilitating automated simplified advice services in the workplace but there was more it could have done to make it easier for firms to make face-to-face recommendations where somebody may not have the relevant qualifications but is working towards them.