Advisers are hopeful the launch of an FCA thematic review into non-advised sales and simplified advice will bring greater clarity to that segment of the market.
Last week the FCA wrote to a sample of 14 firms asking them to supply information on the non-advised or simplified advice services they offer, ahead of onsite visits to be conducted in January and February.
The letter says: “Following recent growth in non-advised and simplified advice investment sales, the FCA is undertaking a thematic review to examine these distribution channels in more detail.
“We want to take an early look at whether these models are delivering good outcomes for consumers.”
Firms are being asked for information including a risk analysis of the service, and details of the process for compiling any ‘best buy’ product lists.
Jacksons Wealth Management managing director Pete Matthew says the review could prompt more players to enter the market.
He says: “If the FCA can use the review to put some meat on the bones of what it expects on simplified advice and non-advice then it could act as a green light to firms and help address the advice gap.”
Aurora Financial Planning chartered financial planner Aj Somal says the distinction between advice and non-advice should be made clearer.
He says: “There is a danger of clients thinking they have received advice when they have not. Non-advised and simplified advice services need to carry clear warnings to the customer.”
Hargreaves Lansdown head of financial planning Danny Cox says: “We think it is important to have a robust and competitive direct to consumer market in the same way there is a competitive advisory market, and will look to support the FCA in any way we can.”