The research found 85 per cent of advisers felt they had sufficient knowledge to advice on with profits but 72 per cent felt providers did not offer IFAs suitable training and relevant information to enable them to give advice.
Aifa director general Chris Cummings says the results of the trade body’s first stakes in the ground initiative found that overall advisers were providing ‘good practice’ when giving advice on these products.
But Cummings says there are still areas to be addressed. He says less complex and more comparable information about the funds in question must be made available from providers.
He suggests there is a prevalence of pre-determined views about with-profits and advisers need to ensure they are fully informed about the details of the products they are advising.
The research also found a “general nervousness” of advising on an area which has been the subject of much adverse comment.
Around 564 firms took part in the research which Aifa says is the largest piece of research on with profits ever undertaken.
Cummings says: “What emerges from this research is the strong divergence of views which advisers hold on with profits products. This is not surprising as it reflects the complexity of the many issues which need to be considered.
There is also a debate to be had about how to tackle dormant or inactive clients. Should the industry be providing information to these consumers, and if so, who should be responsible and how are they going to go about it? And there are also issues to be discussed surrounding switching clients”.
Financial Ombudsman Service decisions director and principal ombudsman Tony Boorman says: “Anything that helps contextualise disputes will be of value to our successors when they come to consider disputes about advice given today.
So I am happy to welcome this first strand of work on with profits, as the first step in what will be a valuable contribution to future complaint management and decision making”.