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More woe for IFAs as FSA seeks to redefine advice

IFAs are set to be subjected to yet another retail review as the FSA attempts to match its consumer education budget with the types of financial advice available in the market.

In a paper seen by Money Marketing, expected to be published by the end of the year, the FSA has outlined its belief that consumers should identify financial advice with particular stages in their lives.

It plans to encourage advisers to specialise in particular areas of business and spend its resources in making consumers aware of the different types of adviser available.

Stages are classified as activities such as household, including mortgages and general insurance, medium and long-term savings, health protection and retirement, with related products included in each one. Alternatively, it says they could be first job, first home, starting a family and retirement.

The paper says advisers could choose to specialise in particular areas, leading consumers to identify certain advisers with stages in their lives.

Aifa says it appears that the FSA may be attempting to shift advisers from providing acrossthe-piece financial planning to specialist advice, a move it would firmly reject. Director of policy Fay Goddard says: “What IFAs give is advice. The whole point we have been trying to make is that advice is an holistic exercise, not one that can be chopped up. You cannot pigeonhole things into either products or needs.”

Sofa managing director Brian Lawless says: “Do they mean to group together specialist advisers in one firm or are they talking about grouping together firms which specialise in a particular area?”

FSA spokesman Rob McIvor says: “It is kind of a blue sky proposal. We are trying to look at the whole consumer education agenda. The biggest problem we identify is consumers only need information about financial products at certain stages in their lives.

“How do we capitalise on that, both in terms of providing them with information and making them aware of the types of advisers available?”

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