The FCA should approve fact finds that come out of the Government’s pension guidance sessions “as gospel” to encourage an advice-lite offering, according to David Williams IFA consultant Stephen Womack.
The regulator is currently consulting on proposals for how guidance will work in practice. Under these plans consumers will be given a record of the session including the options discussed, key facts, potential consequences of different options and information on how to shop around.
Speaking at an event at the Prudential offices in London this morning, Womack said: “One of the most expensive and time consuming aspects of the job is information gathering and fact finding and pulling all of the information together.
“So if one of the outcomes of the guidance process is a document an adviser could take as gospel whether it is wrong or not, can take it as gospel and does not need to repeat the fact finding exercise it could provide a starting point for a lighter touch, lower cost, simpler, middle-ground advisory service.”
In July, the FCA’s paper on simplified advice was criticised for failing to set out how different types of advice would be regulated compared with full advice. It also failed to clarify how any resulting complaints would be treated by the Financial Ombudsman Service.
The Pensions Advisory Service chief executive Michelle Cracknell agreed with Womack that the regulator needs to act to give advisers the confidence to provide some form of simplified advice.
She said: “People will emerge out of the system that we will identify and recommend they go and get advice. But they do not need the full outfit, either because they cannot afford it or they have a very specific need they need met. I do not think we have had enough from the regulator yet to give advisers the confidence they can do a slimmed down ‘lite’ version.”
Key Retirement Solutions associate director Billy Burrows added: “There shouldn’t be any compromise at all on the quality of advice on suitability, but if you are only advising on retirement options your can make the process simpler.
“The regulator has to come off the fence here and recognize there has to be a different set of regulations that fit around this simplified or focused advice model.”