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.”