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Basic instinct could confuse the public

Aifa has welcomed the Government’s basic advice taskforce but warns that there must not be a confusion between generic information and generic advice.

Director general Chris Cummings says there is a major difference between information and advice as information can be generic while advice implies a personal understanding of an individual’s needs. He says people need clear reassurance of the boundaries to avert future problems.

The Government this week launched its long-term approach to financial capability, announcing a new taskforce led by Aegon chief executive Otto Thoresen to research and design a national generic financial advice service.

Thoresen says he will ensure that the concerns of Aifa and other adviser bodies are addressed and says the taskforce will set up a complementary service to the IFA sector that promotes the benefits of independent advice.

Sesame head of communications Ian Thomas says Thoresen’s message is encouraging and he hopes the appointment of an industry figure whose firm relies heavily on advisers will counter negative perceptions of the sector within the Government.

An action plan will be published by the end of the year for a nationwide scheme comprising a helpline, website and a network of new and existing advice centres with links to IFAs and providers.

A cross-departmental ministerial group will co-ordinate the work which aims at having the scheme up and running in five years, in time for the implementation of personal accounts, with costs of £50m a year shared between the industry and the Government.

Cummings says: “We believe there is a major difference between generic information and basic advice. The two must not be confused.”

Thoresen says: “I will be looking to establish a complementary service to the traditional advice sector, focusing on the basics of financial practices and giving guidance, which will instill in people an idea of the benefits of seeking independent advice.”

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