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Tory peers in fresh push for FCA to allow simplified advice

Howard-Flight-2012-700x450.jpg
Lord Howard Flight

Two Conservative peers are making a fresh push for the Financial Conduct Authority to allow simplified advice following the recent wave of exits from mass market advice.

Money Marketing figures show the number of bank advisers had fallen 44 per cent on 31 December 2012, the first day of the RDR, compared to the previous year. Since then Santander , Axa and Aviva have also exited the market. Brands such as Lloyds Banking Group, Barclays and HSBC have also either withdrawn from the advice market or limited their offering to those with at least £50,000.

The FSA launched a consultation on simplified advice in September 2011 but refused to relax adviser charging or liability rules meaning it never got off the ground.

Lord Howard Flight says: “I will certainly be raising the issue again and the FCA is committed to reviewing the RDR in the coming year. The team now running it was handed with a fait accompli so I hope they will see the light as the conduits of mass market advice are drying up.”

Lord Robin Hodgson says: “The FCA will need to allow simplified advice to deal with the mass market. It needs to allow judgement and not a hopeless tick box approach that lets people blame all bad decisions on someone else.

”I am interested in finding ways to make sure people are well looked after as they are taking more responsibility for their financial affairs.

Lord Flight warned last August in a letter to the Financial Times that the RDR will result in advisers losing interest in serving clients with less than a £100,000.

Tory peers also said last November the Government was complacent about the effects of the RDR and was facing a “shambles ” and a “crisis” in the savings market.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Roman Duzinkewycz 1st May 2013 at 9:23 am

    Simplified advice – great idea – that’s why I went through many hours of study to give simplified advice to the mass market – jokers all.

  2. Caroline Rookes will be rubbing her hands together.

  3. Two Conservative peers supporting the terrible banking advice community that has served the country so well (NOT). No vested interest there then!

    Maybe the Conservative peers would like to support the advice industry e.g. IFA’s and encourage other companies to open up to provide advice that is desperately needed by millions of individuals and in force present regulations rather than undermine IFA’s at every turn.

  4. Surprise surprise! RDR has ruined the savings market. How many times have we told them?

  5. The FCA will take about as much notice of these two gents as an elephant would do a gnat.

  6. I am surprised that so many Advisers are shocked that the Government, MAS and the Regulator want to get into bed with banks. They always have since FIMBRA days.

    Hoban was a BIG fan of the banks and made no secret of it so are many many others and more importantly it is those that dictate regulation.

    RDR is catastrophic for the savings and pensions market but the demise of access to advice and the resulting supposed closing of the gap by the likes of MAS is equally laughable – guidance/advice without proactive action on the part of the ‘adviser’ is a conversation down the pub and nothing more will come of it. Simplified sales and advice suits the Government, MAS and Regulator down to the ground – it wont work but then initiatives from up on high never worked since regulation was dreamt up in 1987.

    As far as undermining IFAs – get real !

  7. Its the wrong question... 1st May 2013 at 1:35 pm

    They are missing the point. It isnt “simplified advice” thats needed, its “good advice that can be provided simply”. They are totally different things and we could easily do the latter very competently, quickly and cheaply if the regulations permitted us to.

  8. What exactly is simplified advice?

    Simplified Adviser – “You need to save for your future”
    Client – “Ok, how should i go about that?”
    Simplified Adviser – “Well thats a bit complicated, sorry can’t i help you need a regulated adviser”
    Client – “What the……………… What is the point in coming to see you?”
    Simplified Adviser – “God knows, it’s a good job you don’t have to pay me and those idiots who sat exams do. Bye”

  9. Simplified advice…put your money in the bank or BS and have a loss when inflation is taken into consideration!

  10. Derek Dinkleberry 7th May 2013 at 9:24 am

    If we start from the premise that the simplest FS product is Level Term Assurance, there’s no way it can be simplified other than by ignoring Premium Payment Insurance or effecting a trust to own the policy.

    The latter is crucial to enable the policy proceeds to be paid immediately to the intended beneficiairies without falling into the estate of the life assured and getting caught up for many months in the probate process. If and when that happens, how many dependent families would be glad that they saved a couple of quid a month by buying a simplified product?

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