Advisers need guarantees from the Financial Ombudsman Service that it will treat complaints about simplified advice fairly before the industry can begin to address the advice gap, says Personal Finance Society president David Ingram.
At the annual PFS conference last week Ingram said the advice profession needs the support of the FCA and FOS before simplified advice solutions can gain traction.
Speaking to Money Marketing, Ingram said: “The industry is more scared of FOS than the FCA. The FOS seems to interpret regulation in its own way and we want a guarantee it will not apply regulation retrospectively. That will give us comfort and bring simplified advice back to the table.”
He added: “Simplified advice is unlikely to involve a full fact find. We want to make sure the FOS does not come along later and say if you had asked more questions you would have found the consumer had this product, or this debt. Simplified advice cannot be judged on the same standards as full advice.”
He said the PFS, FOS and FCA are all part of an industry working group on the issue, set up by the Tax Incentivised Savings Association in March.
A spokeswoman for the FOS say: “Whether a consumer was advised on a full or simplified basis, we would look at whether the advice was appropriate and easily understandable.”
Yellowtail Financial Planning managing director Dennis Hall says: “This is a concern because advisers have little faith in FOS decisions. With simplified advice consumers should take a greater degree of responsibility for their decisions.”