Advisers have reacted angrily after FCA chief executive Martin Wheatley accused the industry of “sitting on their hands” since the RDR rather than innovating to close the advice gap.
Speaking at the Lanson’s Future of Financial Services conference in London last week, Wheatley admitted the regulator’s simplified advice initiative has failed to take-off.
However, he claimed advice firms have been “waiting for the next step” to be laid out for them rather than developing new propositions.
The regulator has recently launched its Project Innovate initiative in a bid to drive innovation. Wheatley said: “One area I would include here as a priority is automated advice where we have seen some leaps forward in related tech over the decades but frankly not enough.
“The reason we launched Project Innovate is we have been very concerned that particularly in the advice sector there has not been enough innovation since we launched the RDR and there has been a lot of people sitting on their hands waiting for the next step.”
M Thurlow & Co senior partner Blair Cann says: “No adviser I know has been sitting on their hands. It is complete nonsense and will just drive a wedge between the regulator and the regulated.”
Coast to Coast Financial Planning IFA Andrew Dawson says: “It is not our job to fix the advice gap. The regulator created the climate, now here is the weather.”
Responding to a question from Money Marketing, Wheatley said the regulator was trying to develop a “guided advice” space with less suitability obligations than full advice.
He said: “We are trying to work out how you navigate between what is clearly advice, what is clearly not advice, what is self-execution and what is guided advice.”
Facts and Figures managing director Simon Webster says until the “crushing weight of lifetime liability” is lifted, progress will be slow.
He says: “You still have unlimited liability if it goes wrong because the FCA will not say this is approved and you can never be found liable.”
But Basi & Basi Financial Planning managing director Michael Basi says: “Wheatley is probably pretty accurate. The advice community has not been the most innovative.
“They are a lot like black cabs in many ways, change is having to be forced on them.”
Norwest Consultants principal Harry Katz: “Being an IFA is bloody hard work. I work a six-day week and put in at least 60 hours. On an hourly rate I earn less than a train driver.”
Susan Hill Financial Planning chartered financial planner Susan Hill says: “If I put people on to a D2C platform and say come back in 3 years and we will talk again I need to know that is compliant. How do we know until they tell us?”
Harvest IFM managing partner Julian Stevens: “Does “automated advice” mean decision trees? Been there, done that and it didn’t work. Who will be held accountable when the customer fails to use the decision tree process properly and makes the wrong decision?”