The FSA is suggesting that perfect advice is software-driven rather than faceto face through an IFA.
Buried in the back of a companion document to the stakeholder sales process consultation paper CP04/11, the FSA says it has identified the benchmark for perfect advice by configuring a web-based financial planning tool.
IFAs are in uproar at the idea that perfect advice comes without an adviser.
Syndaxi director Robert Reid questions how a system is able to capture subjective predictions of inflation and markets that IFAs are called on to perform when advising clients.
But the FSA disagrees it is implying that best advice comes from software systems. Spokes-woman Jackie Blyth says the benchmark was only valid within the confines of research into consumer stakeholder purchases.
Financial Technology Research Centre director Ian McKenna says: “The FSA has quite clearly defined what it thinks are the parameters for perfect advice. They are not just talking about their consumer research.”
Reid says: “Are they saying the person who designs the advice system is the font of all knowledge? At the end of the day, advice is subjective. It is a little hypocritical that the regulator is pulling out of system-generated projection rates and at the same time they are calling a web-based financial tool 'perfect advice'.”
Blyth says: “We are not saying that software can replace an adviser.”