It is particularly concerned that final regulations for the new basic advice sales process, published last week, place all the responsibility for producing a script on the firm.
The FSA says that while it understands demands for prescription, it believes firms are best placed to design scripts appropriate to their own business models.
It suggests that the industry could “collectively devise some guidance for best practice” but Aifa director of policy Fay Goddard is doubtful that basic advice will benefit the IFA community.
She points out that if a firm is offering basic advice to clients, it cannot tick the box on its initial disclosure document saying it offers products from the whole of the market. This would mean that IFAs wanting to offer basic advice would have to set up a separate business division.
Goddard says: “It is very difficult to see how this will work in practice or be of benefit to the IFA community. We did not like the original proposals and, as these have hardly changed, there is no more reason to like them.”
ABI head of regulation and strategy Francis McGee says: “Delivering generic advice and guidance as well as deciding product suitability requires a level of work from advisers that is a tall order. We will try to improve things with clear industry guidelines but we can operate only within the bounds of these rules.”