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Panel sees no value in primary advice

The Financial Services Consumer Panel has hit out at the FSA’s plans for primary advice, saying it does not see “any value” in the proposals set out in the retail distribution review.

The attack is a further sign that the FSA’s primary advice plans are proving unpopular across the industry, with growing concerns from key stakeholders about the potential for consumer detriment and worries that there will not be a market for the service.

FSCP chairman John How-ard says there should be a twotier system consisting of “independent advice” and “sales”, with only advisers who have passed appropriate exams, researched widely and provide unbiased, fee-based advice able to use the independent tag.

Howard says: “You will understand from the simple model I have proposed that I do not see any value in primary advice as described by the discussion paper.”

Money Marketing understands there is growing concern at a high level within the FSA that primary advice could lead to consumer detriment. Many big providers, which commentators would have expected to offer primary advice, are failing to see where they will make a profit from the scheme.

Norwich Union said recently it would not be offering primary advice and some big banks are investigating potential alternatives to primary advice using many of the rules currently in place.

At a recent Cicero Consulting conference in London, FSA head of the RDR Amanda Bowe admitted that feedback on the primary advice proposals had been mixed, with a common message that it should not be referred to as advice but as a product sale.

Bowe told delegates that the FSA would not proceed with a design that would lead to consumer detriment and there needed to be demand both from consumers and firms supplying the service.


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Outside forces continue to rock the FSA

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Primary school of thought

This week, the panel responds to a question on how the panel thinks the FSA’s proposed primary advice channel should structured and integrated with the professional financial planner tier. The panel is available to answer any technical questions about the potential future market and where individual firms may want to consider positioning themselves and broader issues concerning the review. If you have any queries you want answered before submitting a response to the discussion paper, or any nagging questions you do not feel have yet been addressed in these pages, please email the panel at

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(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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