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Tisa wants business rules eased for online advice

The Tax Incentivised Savings Association is calling on the FSA to relax its conduct of business rules to make it easier to give advice on simple products online.

It says the FSA needs to relax the laws on how much information an adviser must gather about a client to enable online simplified advice to work efficiently.

Tisa says mass-market clients will increasingly look to online advice as the most affordable option as the RDR pushes IFAs towards high-net-worth clients.
Tisa distribution advisory council chair David Hazelton says uncertainty about how the FSA and Financial Ombudsman Service will view online advice prevents advisers from offering the service.

He says: “There is a definite need to be able to give this kind of simple advice online but we need more flexibility from the regulator to be able to do this.
“What IFAs want to know is that they are not going to be subject to a misselling claim 10 years down the line.”

Consillium Financial Planning managing director Kevin Morgan says: “In principle, it sounds like a good idea but you have to be wary of unscrupulous people who could use this as a short cut past giving quality advice. It would have to be available only for simple products.”

Hughes Carne IFA director Keith Jarman says: “I think it is a dangerous game to start giving advice without having at least a phone call with a client where an adviser can get a feel for their situation. However, if the banks get behind such a proposal, then the FSA will probably allow it because the banks are the ones that push these things through.”

An FSA spokeswoman says: “Advice given in any situation, whether face to face, over the phone or online, is still advice and the rules in place need to be followed.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I fail to see how you can have on-line advice.

    You can have decision trees but they aren’t advice.

    A number of questions online doesn’t mean that you actually understand the meaning of the questions. Thats where the face to face part comes in in establishing that a client fully understands what risk is etc.

  2. An FSA spokeswoman says: “Advice given in any situation, whether face to face, over the phone or online, is still advice and the rules in place need to be followed.”

    So whether you earn a penny or a pound you will still be liable.

  3. I agree with Sean.
    Advice is advice
    Information is information
    a “guided” service of a decision treat is not specific advice appropriate to the individual.
    It doesn’t help that the MAS is called a “money advice service”, when it should have been a MIS Money information service.
    A good information service is fine, but call it that, don’t dress up something as advice, when it is only information and whetehr the FSA is persuaded to change teh definition or not is immaterial as the courts are the ultimate arbiter (just, still) if a client wishes to pursue matters.

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