The FCA has admitted its efforts to clearly set out the requirements of independent and restricted advice are “not working”, but says to change the labels now would only create further confusion.
At a press conference in London this week, FCA long-term savings and pensions director Nick Poyntz-Wright said the regulator recognises the confusion among advisers over the labels.
He said: “We hear from advisers wanting more clarity on what they need to do to be independent, and from restricted advisers on the way the label is perceived.
“We have done a lot of adviser workshops on this, but perhaps we ought to do something more widely to communicate our expectations, although from our perspective that would be restating what we believe we have already said.
“We have made best efforts to be clear but we have to recognise that does not seem to be completely working so we are going to redouble our efforts in that area.”
Asked whether the FCA has any plans to change the labels, Poyntz-Wright said: “We have not got any plans to do that at the moment. I think that would be even more confusing potentially.”
The FCA’s first post-RDR thematic review, published in July, raised concerns about firms describing themselves as independent when they are in fact restricted.
The results of the second review will be published later this quarter.
Plan Money director Peter Chadborn says it is the labels themselves which have created confusion.
He says: “The FCA has done a lot of work with the industry to make its requirements clear, but the clients I speak to are still confused by these terms and that is clearly not right. If something is broken the FCA should fix it.”