Investment management Association chief executive Richard Saunders has questioned the ABI’s call for the general financial adviser category to be only temporary, saying consumers need a middle ground between primary and fee-based advice.
Saunders says he is concerned that the removal of GFAs would leave thousands of people who cannot afford to pay a fee without access to any form of specialised advice.
IFA Promotion estimates that with the ABI also lobbying for commission offset to be banned, only 2 per cent of existing advisers would fit into the professional financial planner band on this basis.
Saunders says: “There is scope for an in-between as someone can also offer general financial advice. Different people need different business models. If there are questions over the general financial adviser category, that does not necessarily mean it has to disappear.”
Saunders has also called for the independent tag to be restricted to advisers that source products from the whole of the market.
He says: “Why would you want the independent moniker to be restricted to those who are up-front only or take the fee out of the investment? The payment of trail with fully independent advice means that the client and the adviser has an alignment of interests in a transparent way.”