Ernst & Young insurance leader Shaun Crawford says providers and advisors must find a viable way to provide advice to the mass market.
He says: “It is clear that a section of society needs to be pushed rather than guided into buying protection and long-term savings products and this should start from the focus of consumer need.
“This is the big unanswered question within the RDR interim review and it will require a lot of work from providers, and particularly banks over the next few months, to convince the FSA that there is a real need for tied or multi-tied advice. The FSA now urgently needs solutions from the industry and not questions and challenges.”
Crawford also believes that challenges remain for advisors and providers who need to agree with customers the cost of their advice and change their practices and operating models accordingly.
He says: “Given the likely shift to using open architecture and more innovative solutions, life companies are also expected to consider to what extent independent financial advisers will continue to recommend traditional packaged life and pensions products.
“It is critical that IFAs consult with their customers to ensure that they reach agreement about the cost of future advice, rather than be forced into meeting a deadline to do this at some point further down the RDR road.”