British Bankers’ Association chief executive Angela Knight has written to the FSA calling for a simplified advice model she says will allow mass market consumers to continue to have access to advice post-RDR.
In a letter to FSA chief executive Hector Sants, Knight (pictured) argues a central 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 says the RDR will deter mass market customers from taking advice, but believes that a simplified advice model will be able to bridge the gap.
The trade body says a simplified advice model would focus on straight forward 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, says the trade body.
The BBA proposes the service would be delivered by suitably trained and supported staff, but at a level below the qualifications required by the RDR, who would not have the discretion to alter the recommendations provided by the model.
BBA chief executive Angela Knight says: “We share the FSA’s aim of ensuring that consumer protections are in place and that high quality, cost-effective advice is available to people who need it. But we are concerned that advice will be written off as too time-consuming, expensive and complex by the very people who need it most, unless an alternative to full advice emerges.
“We feel that simplified advice will provide the safeguards that consumers need, while delivering effective advice at a reasonable cost.”