View more on these topics

Advice review eyes role for new advisers but no long-stop


The Financial Advice Market Review could see new advisers playing a role in plugging the advice gap but looks unlikely to deliver a long-stop due to provider opposition.

The return to some form of commission, which has ignited fierce debate since Money Marketing revealed the proposal last month, is thought to have split the expert FAMR panel ahead of Chancellor George Osborne outlining any measures for advice market reform in the Budget next month.

Further details about the options on the table have since emerged, and Money Marketing understands the panel is keen to establish a “regulated role for new entrants to the advice market”.

The panel is not thought to be considering a wholesale shift on the minimum qualification requirement for advice from QCF level four to QCF level 3. Instead panel members would like to see one of two frameworks put in place.

The first option would be a framework that allows less qualified advisers to give advice on certain products or through a decision tree process, but supervised by a qualified adviser.

The second option would be a process designed by the qualified adviser but delivered by a lower qualified adviser.

The introduction of a long-stop has also been debated, but the proposal does not have the backing of all the panel members.

A source says: “The difficulty is finding a system that works for the biggest firms and the smallest firms. The long-stop is important to small firms, but the economics are different when it comes to providers. Providers neither want nor need a long-stop.”

Apfa director general Chris Hannant says Osborne is likely to give a high-level overview of the kind of advice market the Government wants to see, with details on the framework and necessary qualifications worked out at a later stage.

He says: “What is most important is we get a mechanism where there is new blood in and more people to give advice, but that can be delivered in a shorter timeframe than a full advised process with less client information collected.

“The long-stop is about expanding the market for full advice. The whole system around advice liability is broken and needs to be addressed.”

Personal Finance Society chief executive Keith Richards says: “There are possible options being considered which could include the introduction of a new level of financial advice, or a qualified guidance solution, both of which are likely to have an appropriate level of qualification but below that of evel 4.

“The use of decision trees has never proved particularly consumer centric, but considerations of how to structure the new level of simplified advice or qualified guidance will be key and will almost certainly involve a defined range of lower risk investment and savings vehicles.”

Richards backs the reinstatement of a long-stop, arguing there has been significant reform since the Law of Limitation was varied.

He says: “The long-stop was removed at a time when a significant volume of 25-year savings products were a prominent feature of the market, and therefore the 15-year long-stop was appropriately changed to better protect consumers and influence the behaviours of those selling long-term products.

“As reform of the market is so clearly evident and the lack of capped liability is a barrier, it is only right a long-stop should be reinstated and it should not therefore be seen as taking away protection from consumers, especially as there is no evidence of complaints exceeding 15 years. It should also be noted that the Financial Services Compensation Scheme operates a 15-year long-stop.”



Challenger bank eyes RBS spin-off Williams & Glyn

Challenger bank Secure Trust is weighing up a bid for Royal Bank of Scotland arm Williams & Glyn, according to City AM. Santander and BBVA are also tipped to bid for Williams & Glyn, which has 300 UK branches. RBS must sell Williams & Glyn by the end of 2017 under the conditions of its […]


Which asset manager closed the most funds in 2015?

Aberdeen Asset Management closed 28 funds last year, more than any other investment firm, following the acquisition of Scottish Widows Investment Partnership. The asset manager closed 22 Aberdeen funds in 2015 and six Scottish Widows funds, although 20 of those funds were merged into existing funds, Morningstar data shows. The data shows 172 new funds were established last […]


Legg Mason scraps trail commission across fund range

Legg Mason has cut fund management fees on the Class A shares of its funds ahead of the sunset clause as it scraps trail commission. The asset manager will cut the annual management charges on its fund range as a result of the move, from 1 April 2016. For fixed income funds the charge will drop by […]

FCA logo new 3 620x430

‘Toothless’ FCA escapes vote of no confidence

The FCA has come under fire over its approach to regulating financial services but escaped a vote of no confidence. The regulator was branded “blundering” and “weak, toothless and anaemic” by MPs angry over the way FCA has treated businesses and consumers. MPs were gathered to vote on a motion tabled by Conservative MP for […]

Welcome to The Brunner Investment Trust PLC

Welcome to the latest update for The Brunner Investment Trust PLC from the trust’s portfolio manager Lucy Macdonald. Market Review Global equities ratcheted higher throughout February, buoyed by optimism about global growth and corporate earnings. All regions advanced, although Japan tended to lag many other markets. In sector terms, healthcare, information technology, consumer staples and […]


News and expert analysis straight to your inbox

Sign up


There are 11 comments at the moment, we would love to hear your opinion too.

  1. As an adviser I’m somewhat appalled that providers have seemingly undercut advisers legimate call for the long-stop to put them on the same terms as other professionals.

    I wonder if all of the providers that apparently ‘neither want nor need a long-stop’ would be willing to go on record about this, as I am sure that my fellow advisers would like to know which providers have failed to support them on this matter.

  2. “Providers neither want nor need a long-stop.” I wonder why. Most do not give advice.

    So if I understand this correctly. The providers, most of which do not offer advice, but also admit they are so big and powerful they can offered to pay out anyway, don’t want advisers to have a legal long stop.

    Who has been the big companies biggest competition in the market?
    Who can take their poor value products away and place them else some where better?
    Who has the lowest level of upheld complaints?
    Who is carrying the liability for the business they place with these providers?

    Big brother!!!!!!!

    What would be the most effective way to kill of this threat to their direct sales?

    I sometimes wish we lived in the wild west, at least I could take a pot shot at these rustlers.

    • If a director of a provider wants no longstop, then get them to PERSONALLY commit to the removal of it for their shareholdings.
      Outlaws have nothing to loose and if we are not given the same protections and are put pitside common law (Outlaws) how do you expect us to react?

  3. No longstop = no reform

  4. Anthony John Etkind 4th February 2016 at 3:44 pm

    Make the directors of the providers personally liable – then see if they are so unenthusiastic about a longstop.

  5. I am at a loss as to why providers should be against a long stop. What difference does it make to them.

  6. Natalie, as you presumably know which companies are against the long stop would you please name and shame them or is it a national secret?

  7. Is it just me or is there a severe lack of soundbites on how to make the current system of delivering advice much easier, simpler and cheaper?

  8. So much for APFA’s valiant and dogged efforts. What’s your next proposal?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm