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Savers divided over advice long-stop

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Consumers remain divided on the introduction of a long-stop to limit liabilities for advisers, according to research from LV=.

In a survey of 836 people in December, the provider found 40 per cent of pension holders over 55 would describe the measure as unfair.

By contrast, 31 per cent said such a measure would be reasonable, with the remainder unsure.

In addition, 24 per cent said this would make them less likely to pay for financial advice.

It comes after Money Marketing revealed a long-stop, which is being consulted on as part of the Financial Advice Market Review, would have affected just nine Financial Ombudsman complaints for the year 2014/15.

At the same, LV=’s research also found almost two-thirds of over 55s would be concerned by a potential “safe-harbour” limiting customer protections in order to boost innovation in the market.

LV= head of automated strategy David Stevens says: “Current regulatory standards provide protection when customers pay for advice and there is a risk the public will see safe harbours as a way to allow firms to deliver poor outcomes without offering this protection.

“This is likely to damage consumer trust and put people off taking advice at a time when we as an industry should be finding new, innovative ways to make advice more accessible.”

Plan Money director Peter Chadborn says: “If more consumers had a long-standing and valued relationship with an adviser they would agree that the lack of a long-stop is unreasonable.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Bernard Wooley: Sir Humphrey, when surveyed most savers thought a long stop for financial advisers would be fair.

    Sir Humphrey: Well then, commission another survey showing most savers think a long stop would be unfair.

    BW: I don’t see how savers could be both for and against a long stop.

    Sir H: It’s simple Bernard. Do you think the law should be fair to everyone?

    BW: Yes.

    Sir H: Do you think that if someone suffers harm they should seek justice immediately, and not wait until so much time has passed that nothing can be proven either way?

    BW: Yes.

    Sir H: Do you think that financial advisers should benefit from the same long stop protection as solicitors and other professionals?

    BW: Yes.

    Sir H: And then we simply print the results of the last question and don’t publish the first ones. Now let’s try again. Do you think that advisers should be held responsible for the advice they give?

    BW: Yes.

    Sir H: Do you think that savers should still be able to seek justice even if it’s many years before they realise they’ve been conned, like the endowment scandal?

    BW: Yes.

    Sir H: Would you oppose a long stop for financial advisers?

    BW: Yes.

    Sir H: There you are, Bernard. You’re the perfect balanced sample.

  2. Again naff research. Oh how we suffer from this blight.

    1. What were the socio economic groups?
    2. Did the respondents actually have an IFA that the consulted regularly?
    3. Did the respondents have any investments of pensions purchased through an IFA?

    Until that is established the findings are pretty meaningless.

    Please, if you are going to undertake research do it properly.

  3. I wonder how many consumers can differentiate ‘advice’ from ‘guidance’. The latter is becoming very widespread and comes liability free, rendering the long stop issue irrelevant. Once again the industry has adapted and overcome which must be somewhat vexing for those that seek to put us out of business.

  4. If I was a consumer I’d want maximum protection and the ability to blame others for any mistakes that I was party to, all with the benefit of hindsight. Would like to see how the questions were phrased. Was it “Have you needed to seek advice but were unable to find an adviser willing to help you for a fee you could afford ?”

    If so, maybe the issue is that consumers have too much protection under the regulations, of course most don’t know these exist anyway, so ask them “Would you be willing to forego the ability to complain after ** years have passed if it meant you were more likely to find / afford advice today ?”

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