The Chartered Insurance Institute is calling on the FSA and the Money Advice Service to proactively communicate the differences between simplified and restricted advice to consumers.
In response to the FSA’s simplified advice guidance consultation, CII director of policy and public affairs David Thomson says the two bodies need to educate consumers about the RDR.
Thomson says: “The focus is now on the FSA and the MAS to ramp up their preparation for the RDR and explain the benefits to consumers. They particularly need to do that over simplified advice because it is not clear and the average consumer will get very confused about what is restricted, simplified and basic advice. It is all very well for advisers to sweat blood to get qualifications and everything else but the FSA needs to give support to that final hurdle.”
Thomson also says the paper has not touched on other regulatory initiatives which overlap with simplified advice.
He says: “The simplified advice paper does not mention all the other changes coming down the track such as simple products and product regulation.”
Paladin Financial Services managing director Tim Purdon says consumers tend not to understand the different levels of advice. He says: “It is the FSA’s responsibility to have a clearly understood structure so consumers will understand what sort of advice they are getting.”