If there’s one thing I’ve learned from looking at bank advice for our cover story this week, it’s that finding out exactly what everyone is doing and when is a nightmare. Each high-street name has a unique lexicon for how it refers to its services, how it explains its charges and the nature of its restrictions.
Timeframes for launches are malleable and pilots come in and out of fashion. One thing is clear though: there is a definite move on the part of banks towards offering personalised advice, as opposed to generic guidance.
That distinction really does matter. It is one thing to have an automated tool like an app that just nudges people to save more. To have someone conduct a full fact-find and present the client with a fully tailored set of recommendations is a different beast entirely.
The distinction also very much matters to the FCA. One of the parts of the Financial Advice Market Review where we have seen the fastest progress is on precisely that difference, clarifying where advice starts and guidance ends. The point of that review was to get more providers offering help to those who needed it without fear they would overstep the boundary into advice. The banks have gone in the opposite direction. They have voluntarily decided to bear the cost of regulatory reprisal should it all go wrong.
It is a calculated risk. It is the banks throwing down the gauntlet to themselves that they can get it right this time, and that a new generation of post-freedoms savers has needs more complex than their guidance services are cut out for and are willing to pay for deeper help.
Since the RDR, banks and traditional advisers have mostly served different markets; banks the lower-value consumers who just need to know if they should be saving more into their pension or how much they would need to earn to afford a mortgage, IFAs the face-to-face, better-off consumers with accumulated wealth. No doubt the banks will convert some clients currently in the former camp into the latter as they set up full planning services.
But a significant number of clients just won’t trust the banks to give them impartial advice on something as precious as their pension. Financial education is slowly but surely revealing the value of what advisers do to the public. When given the choice, the pitch from advisers will reveal itself to be the most enticing one.