Aviva chief urges Govt to loosen advice regulations


Aviva UK Life chief executive Andy Briggs is pressing the Government and the FCA to loosen regulatory requirements so advisers can develop low-cost advice models.

The Treasury and the FCA are to carry out a major review into financial advice to establish how the market can function better for consumers.

The review will be supported by an advisory panel led by Scottish Widows chair Nick Prettejohn and will look at efforts to bridge the advice gap and the obstacles preventing the growth of affordable advice.

It will cover products including pensions, annuities, savings, mortgages, and insurance. Initial work will be done over the summer with a consultation in the autumn.

Final proposals are expected ahead of Budget 2016.

Briggs is calling for a more pragmatic approach from the regulator so advice can be given on single products without considering other plans or assets.

He says: “At the moment the way the regime works, if people get advice there needs to be a 100 per cent success rate in getting the right outcome. That means an awful lot of people don’t get advice.

“We need to be prepared to slip that 100 per cent. So for example, you should be able to just advise someone on their pension without taking into account other products like existing endowment policies.

“There is a chance the advice won’t be fully optimal but, for the vast majority of people, the outcome will be much better than if they get no advice at all. We need some pragmatism from the regulator.

“If you try to ensure that advice always leads to customers making the right decision, advice will become a luxury good.”

Zurich UK Life chief executive Gary Shaughnessy agrees.

He says: “The burden on advisers has gone up materially over the last five years. There are people who have basic needs for help at retirement and there must be ways of making that simpler and more cost effective for advisers.”