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BBA and Lord Lipsey clash over ‘restricted advice’ label

The British Bankers’ Association retail policy director Peter Tyler and former Financial Services Consumer Panel chairman Lord Lipsey clashed yesterday over the “restricted advice” tag set to come in under the retail distribution review.

Speaking at an all-party parliamentary group on insurance and financial services meeting at the House of Commons yesterday, Tyler said he accepts that there needs to be clearer disclosure on service labelling, but says using the term “restricted” is not the answer.

He said: “We think the word independent works, it resonates with the consumers and it should be the key differentiator between independent and non-independent advice. We have concerns on the label ‘restricted advice’. It could confuse and deter customers from actually taking out services that are labelled as such.”

“The restricted advice labels brings into question the quality of advice rather the restricted product range.”

But Lord Lipsey disagreed. He said: “I think that you are very lucky not to have been told that you just have to call it sales, which up to now is what it has been.

“I think the great benefit of restricted advice is that it feels slightly negative. Whether consumers understand what it actually means in detail does not terribly matter.”

Institute of Insurance Brokers president John Greenway and chairman of the group questioned Tyler over his resistance to the term, saying: “Is it that you do not like the word ‘restricted’ because it gives the impression that somehow the quality is restricted or are you unhappy about the actual tiering that is proposed?” But added: “We need to think of another name for restricted advice, and I take the point that is it advice at all. I don’t know.”

Which? economic campaign manager Doug Taylor says: “All is not agreed on the issue of labelling. There is yet to be a full consensus on a way forward in that area.

“Labels on advice must be clear and unambiguous. Advisers advise, sales people sale.”

But Tyler said current proposals to use the restricted label will lead to a reduction in consumer access to advice as existing advisers take this opportunity to leave the market.

He added: “There is better scope to use more second level descriptors that resonate with consumers and the FSA’s own research. We think there is a solution to be pursued in terms of simplified advice, a fully automated service which will deal with the mass market.”

Tyler says the BBA is currently pursuing this option with key stakeholders in the industry.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Banks should have have to call it ‘sales’ – they have never given advice and never will

  2. How many times over the last 30 years has this discusion been aired!

    Sales is sales,

    Independant advise is whole of market. undertaken by the INDEPENDANT FINANCIAL ADVISORS.


    RDR is redistribution of IFA advice to the bankers. Giving Sales advise (Restricted

    FSA wake up you crowd of *ankers

  3. Consumers know and understand the term “independent”. FACT!

    Millions of pounds has been spent on the independent brand – FACT! .

    RDR will kill off independent financial advice in the UK for all but the wealthy – FACT

    If the FSA can actually kill off the term independent then that will facilitate their designs to pass distribution to tied banks – FACT!

  4. Actually the “Independent” tag may not be as clear to customers as many advisers believe it to be. There was some research carried out about nine years ago, which identified that many consumers believe that the “independent” in IFA stood for a host of negative connotations as in, small with limited resources, one man band with little back up etc.

    As this conflicted with the industry mantra the study was then hastily buried, but I think advisers are all too willing to believe their own publicity on this point.

    Most of the research in this area in my experience lacks objectivity. If you ask the right questions it is very easy to get the results you want.

    Personally I think it is a great pity more is not done to identify the weaknesses in how Independence is portrayed rather than the self serving jingoism which seems to predominate.

    I have come across an increasing number of advisers in the last year how are seeking to distance themselves from the IFA definition believing it to be past its sell by date.

    RDR will force the cost of traditional Independent face to face advice way beyond the budget of anyone not earning at least three times national average earnings. Isn’t it better that people get some advice rather than none at all because they cannot afford it?

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