The British Bankers’ Association has written to the FSA calling for a simplified advice model to allow mass market consumers to continue to have access to advice after the RDR.
In a letter to FSA chief executive Hector Sants, BBA chief executive Angela Knight argues the aim of the RDR – to create a market “which allows more consumers to have their needs and wants addressed”- is in danger of not being met.
The BBA argues the RDR will deter mass market customers from taking advice and believes a simplified advice model could bridge the gap.
It says such a model would focus on straightforward savings, investment and protection needs and be more cost-effective than full advice for smaller transaction sizes.
The service would be automated and deliver suitable, personal recommendations to customers and include recourse to the Financial Ombudsman Service.
The BBA proposes that the service would be delivered by trained staff with qual- ifications lower than those required by the RDR who would not have the discretion to alter the recommendations provided by the model. It says the service could be provided face to face or via the phone or internet.
Knight says: “We feel that simplified advice will provide the safeguards that consumers need, while delivering effective advice at a reasonable cost.”
Threesixty commercial director Phil Young says: “From what I have seen, no one is prepared to accept the liability for giving simplified advice. I think the issue has reached a bit of an impasse at the moment.”
Plan Money director Peter Chadborn says: “I would argue that the banks have been offering simplified advice all along.
“I would agree that guidance is needed on what is meant by simplified advice, as a bank’s interpretation of simplified advice and an adviser’s interpretation is likely to be very different.”