FSA chief executive Hector Sants has revealed plans to consult on guidance for simplified advice, as he admits simplified advice services will be crucial post RDR.
Speaking at a British Bankers’ Association conference in London today, Sants (pictured) said the regulator realises the RDR means significant change for the industry but believes it will lead to an improved market in the long term.
Sants says: “I should however note that we do recognise that, whilst not specifically an issue which the RDR seeks to address, in order to ensure the financial market place is fully effective for investors, it is vitally important that a credible simplified advice service exists alongside the full advice offering.
“Ultimately it is for firms to introduce such services, but we are currently working with them and later in the year we plan to publish more detail on the regulatory framework.”
The FSA plans to consult on simplified advice guidance later this year.
BBA chief executive Angela Knight wrote to Sants last month arguing that a simplified advice model is needed to meet the requirements of mass market consumers post RDR.
It follows a consultation on simple products put out by the Treasury in December.
In the consultation the Treasury called on the financial services industry to develop a range of simple financial products, starting with savings and protection products.
The Government’s idea of simple products ties in with work carried out by the BBA and the Association of British Insurers in developing a simplified advice process.
But although the work has been ongoing for several years, Money Marketing understands that the regulator has been dismissive of the simplified advice models put forward so far.