In its policy paper, Restoring Trust in Financial Services: Building On That Which Works, Aifa demands clarity for consumers on different types of services.
It says IFAs should be at the top of the intermediary market while company representatives act as a non-advised channel with a disclosure regime to reinforce limits of agents’ competence. The report says: “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 guidance channel.
Director general Chris Cummings said: “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 financial promotions regime to help the public understand what a firm can offer them before they start the advice, sales or guidance process.
Highclere Financial Service partner Alan Lakey supports the label “company representatives” for tied agents but adds: “I disagree that sales and advice are completely separate things. Company representatives might be advising you with a limited range of products and that restric- tion should be made clear, but there is an element of adv- ice in what tied and multi-tied agents offer.”