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MM Leader: Non-advised service could offer flexibility

This week Money Marketing reports on IFA firm Dennehy Weller & Co launching a non-advised platform for clients who feel they do not need, or cannot afford, full independent advice.

The platform, powered by Fidelity FundsNetwork, offers guidance to help investors choose from a range of funds based on appetite for risk.

Platforms and technology suppliers are now looking to give advisers the flexibility to offer non-advised transactional flexibility to clients.

If some clients, particularly low and middle-earners, feel excluded from traditional advice services due to the costs of RDR, such services may offer an alternative to losing the client.

A number of firms are looking at offering layers of advice, based on client need. You could see some younger aspirational clients being attracted to the type of service Brian Dennehy has launched, maybe alongside whole-of-market protection and mortgage advice.

Empowered by the growth of the internet, it would, perhaps, be rash not to consider that some higher-value clients may also want the flexibility to take control of elements of their investment portfolio at certain times, while retaining the services of an IFA.

The RDR will see new players looking to take advantage of any increase in the advice gap but why cannot local IFA firms, who already have a trusted brand in their communities, compete with the backing of a decent technology proposition?

A clearly defined, client-driven non-advised service could well be an attractive string to an advice firm’s bow.

Time didn’t fit the bill

The public bill committee scrutinising the Financial Services Bill finished its allocated sessions last week but failed to get through nearly a quarter of the Treasury’s clauses.

The bill now moves to report stage and a full Parliamentary debate but it is worrying such a large section of the bill was not given proper scrutiny.

Policymakers have a rare chance to improve financial regulation for the better, although there is a concern these rules will usher in a new set of financial regulators less accountable to Parliament and the electorate.

Less haste and more debate and scrutiny would surely be a recipe for better consumer outcomes.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Why is it that we’ve gone to the expense of educating advisers to a higher standard only to have product providers tried to circumvent that service. I get very worried when I see a product provider use the words empowering the consumer when what they really mean is selling as much of their product as possible without having any liability.

    We’ve seen the results of this type of service in the mortgage market over the last 30 years which resulted in one of the largest financial busts of all time. Why is it that execution only or non-advice services have been banned from 2013 in the mortgage market only to be introduced with enthusiasm by our regulator in the investment sector.

    For clients to be able to use this type of product on a non-advice basis should only be allowed if the client can pass a fairly simple test to demonstrate that they know what they are doing. Otherwise they should be directed towards an independent financial adviser. Come on regulator and product providers start promoting the excellent services provided by IFA’s instead of always trying to put us out of business.

  2. The vast majority of people do not use / cannot afford the services of an IFA. This situation will not improve post RDR.

    Any direct to customer offering is to be welcomed as long as it complies with current legislation and the clients understand the situation.

    Peter how would you feel if prospective clients were given a financial products test with those scoring more than 40% barred from using your services even if they definitely want to?

    Those that want to use an IFA should be allowed to, those that don’t should be allowed to go it alone.

  3. Adrian

    That’s OK as long as those clients can never claim on the on the FSCS which IFA’s end up paying for. If we have non-advice then the FSCS needs to be split in two so IFA’s do not end up paying high fees based on Bank non advice sales.

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