At today’s launch of its policy paper, Restoring Trust in Financial Services: Building on that which works, Aifa is demanding clarity for consumers about the different types of services on offer.
Aifa says independent financial advisers should sit at the top of the intermediary market and offer highly professional, competent advice.
It says company representatives should operate as a non-advised channel with a disclosure regime that reinforces the limits of agents’ competence.
The report states: “Regulatory proposals to allow tied and multi-tied company representatives to call themselves ‘sales advisers’ create a muddy middle ground which will only continue to confuse customers and damage trust.”
Below company representatives Aifa says there should be a guided sales and a Money Sense channel.
Director general Chris Cummings says: “There should be total clarity of the available options. It should be easy for the public to tell who is offering them independent financial advice and who is selling them a product. It should build on consumer understanding of simple words like ‘advice’ and encourage competition and higher standards.
“The FSA should not seek to confuse consumers with misleading labels and reduced access to those who consumers trust the most to act in their best interests, IFAs.”
Aifa is also calling for a new financial promotions regime that helps the public understand what firms can offer them before they start the advice, sales or guidance process.
It says: “This would include not only above the line advertising but also the signage on any retail premises and most certainly the firm’s websites and all promotions.”
Aifa’s policy paper found that IFAs are consistently the most trusted of all financial services institutions, in terms of basic job performance and looking after the interests of clients.