Prudential UK and Europe deputy chief executive Barry O’Dwyer says firms are not offering simplified advice services because of future misselling fears.
Speaking at the Lansons Communications Future of Financial Services conference in London last week, O’Dwyer said regulatory uncertainty is stopping progress.
O’Dwyer was responding to the Citizens Advice Bureau, which called for a low-cost advice service to fill the gap between advisers serving only upmarket clients and the Money Advice Service providing basic information.
He said: “The problem is the word advice. If consumers have someone telling them what to do then it opens a Pandora’s box in terms of future misselling.
“It is trying to design something that is short of advice and does not tell consumers what to do but which contains enough information to help.
“The difficulty the whole of the industry is now facing is that firms do not believe they will always be held to a consistent standard.
“Even if you designed something that was not advice, a lot of the industry is concerned it could be construed as advice in 10 years’ time.”
Worldwide Financial Planning IFA Nick McBreen says: “Prudential makes a fair point as there are so many grey areas that it makes people cautious. We are in a world where retrospective assessments are made of what were acceptable business practices at the time.”