We have had simplified advice, basic advice, basic advice plus, guided advice – the list goes on. But it was simplified advice that got the advice profession and the wider industry lobbying the FCA, in the hope that a viable model could be arrived at in time for a post-RDR world.
The stumbling block has always been the liability issue, and the fact that to deliver simplified advice, firms still need to be qualified to level four.
The fact that the then FSA refused to relent on its stance meant a lot of businesses felt simplified advice was dead in the water.
But increasingly, the tone from the FCA is shifting. The regulator is carrying out a thematic review into simplified advice and non-advised sales, and is expected to report in the summer.
FCA chief executive Martin Wheatley has warned the guidance should not be used as a “charter for misselling”, and rightly so.
But he also recognises there is a place for models that sit alongside fully regulated advice, albeit with the controversial line that products can be advised online with no human intervention.
According to EY financial services senior adviser Malcolm Kerr, we could be set for simplified advice Mark II, and it is true a reworked simplified advice model makes sense in light of the Budget.
But the FCA must be careful not to repeat the mistakes of the past this time around, and ensure it engages with advice firms and the wider industry to develop a workable solution for the mass market.
Has the FCA got it wrong on independence?
From one entrenched regulatory battle to another.
Ever since the FSA first confirmed the final rules on independence, advisers have struggled to understand what the requirements mean in practice for their firm.
Several rounds of guidance later, nobody is any the wiser. In this week’s Money Marketing, we examine the argument put forward by regulatory lawyer Peter Hamilton, who suggests the FCA has got it wrong by saying advisers who refer to specialists cannot call themselves independent.
His argument turns on the fact that Cobs rules relate to firms, not individual advisers.
It is an interesting suggestion, and one Apfa and other trade bodies are keen to clarify with the regulator.
At the moment all advisers can do is await the outcome of those negotiations. As pointed out, it would be a brave adviser to defy the regulator on such an important issue without the full facts at their disposal.