Prudential UK and Europe deputy chief executive Barry O’Dwyer says firms are not offering simplified advice services because of future misselling fears.
Speaking at the Lansons Communications Future of Financial Services conference yesterday, O’Dwyer said regulatory uncertainty is stopping progress.
O’Dwyer was responding to a question from the Citizens Advice Bureau which called for a low-cost advice service to fill the gap between advisers serving upmarket clients and the Money Advice Service providing basic information.
He said: “The problem is the word advice. If consumers have someone telling them what to do then it opens Pandora’s box in terms of future misselling. The problem is that most consumers require someone to tell them what to do and that constitutes advice.
“It is trying to design something that is short of advice and that does not tell consumers what to do but contains enough information to help.
“The difficulty the whole industry is facing is that they do not believe they will always be held to a consistent standard. Even if you designed something that was not advice a lot of the industry is concerned it could be construed as advice in 10 years’ time.”
In March 2012, the FSA published its final guidance on simplified advice when it said it must carry the same liabilities as full advice and meet the same adviser charging and qualification rules.