View more on these topics

Robert Sinclair: Laying the foundations for advice market reform

Robert Sinclair 2012 700x450

The Financial Advice Market Review under the joint stewardship of the Treasury and the FCA has been given both a wide scope and a compressed timescale to report.

When compared to the lengthy consideration given to both the RDR and the Mortgage Market Review, this is lightning quick. Because of this the project team, the expert advisory panel and the industry will all have to hit the ground running.

At the Association of Mortgage Intermediaries we want this to be an inclusive review that does not restrict its scope or ambition.

For most people, the conversations they have around their mortgage are when they are most motivated and engaged with advice and financial services. With the current advice models and rulebooks these tend to be discussions limited to the funding of the purchase or remortgage and directly related insurance contracts.

There is no encouragement from Government, regulators, or firms worried about advice risk to expand the conversations. Indeed the current knowledge and competency frameworks and perimeter guidance make this near impossible.

It is the barriers to good discussions that the review will need to address. In the world of mortgages there has to be clear separation between providing information, fact-finding, delivering advice, underwriting and administration including legals. In investments the use of paraplanners, fee-based advice, and keeping product providers at a distance are clear.

The current product-led approach to the rulebook, advisory structures and firms is not serving consumers well. The FCA is right to focus on outcomes and it will only be when the advice process is built around people’s life stages and wider needs that we are likely to get proper traction. Applying another remedy to “simplify” will treat the symptom not the cause. A fundamental rethink of how we approach the consumer and the advice proposition is required.

As borrowing is a prime motivator it might be a good place to lay some foundations.

Robert Sinclair is chief executive of the Association of Mortgage Intermediaries

Recommended

38

Paul Lewis: FCA must rethink ‘restricted’ advice rules

Less than three years since the RDR there is to be another review of financial advice. Here is my two penn’orth. At the moment anyone can call themselves a financial adviser. Even me (*ducks*). What I cannot do is call myself an independent financial adviser, as that term is regulated. Of course, most readers of […]

Managing absence cover image - thumbnail

White paper — managing absence

Employers can do a great deal to help ensure their employees remain fit, healthy and able to work. In practice, having an absence policy can be positive for the whole company. This paper from Jelf Employee Benefits looks at managing absence, including the three Ps of a sickness absence policy: prevention, proactivity and provision.

Newsletter

News and expert analysis straight to your inbox

Sign up

Leave a comment