Advice firms are pushing the FCA to revisit the idea of a workable simplified advice model to help close the post-RDR advice gap.
Networks say the FCA needs to return to the negotiating table as they have gone as far as they can in developing simplified advice models but cannot commit further investment without regulatory approval.
Lighthouse chief executive Malcolm Streatfield says: “There is demand for a simplified advice model and there are companies that would like to do it. The FCA should be getting interested parties round the table to help us find a solution.”
Streatfield advocates a “guided advice” model where a customer completes a scripted set of questions, supported by a telephone call with an adviser. Consumers would be responsible for the investment decision.
On-Line Partnership is piloting an online system which it says has potential to reduce research time to an hour per client.
Joint deputy chief executive Gordon McNeill says: “We have considered a centralised whole of market research tool for simple investments. Depending on clients’ answers, the tool would generate a list of products which the adviser could discuss with the client. We would be keen to put that to the regulator.”
McNeill adds the network would be prepared to take on the liability for the advice because the tool would vet the investment options.
Consultant Peter Williams has previously led calls for a “basic advice plus” regime.
He says: “What the networks are suggesting is something similar to what the banks were looking at two to three years ago. But at the time the FSA was not keen on anything which could disrupt the RDR.
“With the transition to the FCA, the regulator is now in listening mode and I would encourage networks to approach them for a discussion.”