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Old Mutual: Blurred lines of advice holding back customer service

FCA rules on the line between advice and non-advice prevent providers from giving good customer service, according to Old Mutual Wealth customer director Carlton Hood.

Speaking at the Tisa annual conference in London yesterday, Hood said Old Mutual customer service staff feel “frustrated” and “held back” by fears they might unintentionally stray into giving regulated advice.

He told delegates: “Our telephone staff feel held back and very constrained by layers of regulations. There is a fear that they might inadvertently give advice and they are frustrated.

“We have to be brave and help them to find ways through it. It is a difficult environment to give the service and care to customers that we want to.”

SCM Group founder Gina Miller, also speaking at the event, agreed that regulation creates difficulties for client communications.

She said: “There is a problem with regulation because as a provider you have to be really careful when you reach out to consumers, as the FCA has not made it clear what you can or cannot say.”

In July, the FCA published guidance which aimed to clarify the boundaries between advice, non-advice and simplified advice.

But experts said the guidance failed to create sufficient clarity.


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. A clear concise definition of exactly what constitutes advice would be very helpful from the regulator. Will they do it? Absolutely not because that will cut off any form of redress when complaints are made if the provider can show they did no more than the what the regulator said. At some point when a compliant comes to the FOS, it has to make a judgement of whether or not advice was given. They must have to base that judgement on evidence. If they can make that call then they have to be able to state why their view is that advice was given. It should be easy for the FCA to give definition of advice. By default if the file shows fact outside of that definition then no advice was given. Maybe some joined up thinking between the two of them would not go a miss or is that too much to ask for in this day and age

  2. If its that easy, why not propose a definition of ‘advice’ to help? According to Collins “noun: Guidance or recommendations offered with regard to prudent action” – are you suggesting the word should have an alternative regulatory definition?

  3. Ah! this is OM (Oh please can we have the Skandia name back – almost everyone I know still uses it) positioning themselves to go direct. They have already acquired advice firms and I guess would dealy love to do more D2C.

    However I can solve this apparent problem for them – all your operators have to do is refer the caller to an IFA – simple! You still have a fair few of us still passing you business.

  4. This is fair comment.

    When it takes 40+ pages of guidance to explain what is meant by advice then something has gone horribly wrong…

    Perhaps it has something to do with the fact that the definition of regulated advice, like independence, is based on products and/or specific investments (designated investments for the technophiles) and not the advice itself.

    Tinkering and talking will not fix a fundamental flaw.

  5. When advisers and providers both complain that it is not sufficiently clear what the FCA means by advice it doesn’t take a genius to figure out that something needs to be clarified.

    Will the FCA do anything about it? Will they heck…………………….

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