FSA chief executive Hector Sants has stressed the importance of simplified advice services after the RDR and revealed plans to consult on simplified advice later this year.
Speaking at a British Bankers’ Association conference in London last week, Sants said the regulator realises the RDR means significant change for the industry, but believes it will lead to an improved market in the long term.
He said: “We do recognise that, while not specifically an issue which the RDR seeks to address, in order to ensure the financial marketplace is fully effective for investors, it is vitally important that a credible simplified advice serv- ice exists alongside the full advice offering.
“Ultimately, it is for firms to introduce such services but we are currently working with them and later in the year we plan to publish more detail on the regulatory framework.”
BBA chief executive Angela Knight wrote to Sants last month, arguing that a simplified advice model is needed to meet the requirements of the mass market consumers after the RDR.
The BBA and the Association of British Insurers have been working to develop a simplified advice process but Money Marketing understands the FSA has been dismissive of the models put forward so far.
The ABI welcomes the plans to consult on simplified advice guidance. Assistant director of consumers and distribution Peter Jolly says the ABI’s guiding principles for simplified advice, launched at its conference in May last year, should form the basis of the FSA’s guidance.
He says: “We hope we can now move forward quickly and develop the regulatory certainty necessary so that such services can be developed ahead of the RDR reforms being implemented.”