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Industry and CA clash over Catmarked advice

The IFA sector has hit out against Treasury proposals to Catmark financial advice while the Consumers&#39 Association has broadly welcomed a quality standard.

The ABI has warned that introducing a Cat standard for advice would be wrong, with more work needed on the objectives and scope and the role of the Government and regulator.

In its paper, Standards for Retail Financial Products, the Treasury proposes to introduce a Cat standard for a healthcheck financial advice service, where an adviser identifies generic products suitable for a customers&#39 needs. Sofa, the LIA and Aifa all voice their concern over the proposals in their responses to the paper.

But the CA says it supports the idea of basic qualitymarked advice and recommends the creation of a new type of adviser to deliver advice free to consumers who may not be able to afford to visit an IFA.

The CA would see advisers, similar to paraplanners, providing the service through networks such as Citizens Advice Bureaux and post offices.

In its submission, Aifa says: “Cat-standard advice is going to be most appropriate for a Cat-standard investor and we have no indication that they exist, even with the completion of the Human Genome Project.”

Sofa and Aifa say the Treasury has failed to recognise that it is already common for IFAs to offer generic advice which provides consumers with a financial healthcheck-style service. The LIA says the inclusion of cost in benchmarks is “at least inappropriate and at most damaging.”

Aifa and the LIA also say they are concerned about the CA&#39s proposals for the creation of a new category of adviser.

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