FSA proposals to allow multi-tied advisers to recommend products outside their usual range is a recipe for disaster and raises serious training and competence issues, claims Aifa director general Paul Smee.
The proposals, outlined in the draft rules for depolarisation in consultation paper 166, would allow tied or multi-tied advisers to recommend off-panel products if they felt the situation warranted it But Aifa says this would create a worrying situation as most tied advisers lack the competence to search the market for the most suitable product.
Sofa managing director Brian Lawless says the enormous costs associated with training advisers to be able to make recommendations from across the market would make many firms reluctant to allow their advisers to take advantage of the relaxation.
The FSA says any such recommendation would have to satisfy the suitability requirements. The regulator says it would allow individual companies to decide if this would be allowed and to police any recommendations.
Smee says: “Any ability for people to go out of range will raise serious training and competence issues as questions must be asked if they will be able to recommend products suitably.”
FSA spokeswoman Louise Buckley says: “We would expect it to be the exception to the norm but, where it works for consumers, then why not?”