The firm’s Tillinghast insurance consulting business says it is concerned that the desired “end state” envisaged in the interim report contains significant flaws which will inhibit the raising of standards and limit the availability of advice.
It believes the FSA’s emphasis on requiring advisers to select products from the whole market suggests that it regards advice as virtually equivalent to broking.
It says: “This is an out of date and incomplete view. We believe that choosing a product from among competing providers is a relatively small part of the adviser’s service and are concerned that the FSA’s proposals do not appear to recognise or encourage this wider view.”
The firm criticises the FSA for failing to recognise that financial advice can be delivered to a high standard by tied or multi-tied advisers, as well as by whole of market independent advisers.
It says: “Indeed, it is possible for tied advisers to deliver a better service in terms of both outcome and cost. What is important is that advisers have the appropriate skills and tools and that they are remunerated in ways that enable them to assist their clients impartially.
“The quality of advice is increasingly independent of the breadth of the product range available, particularly as product designs become more similar and as wider fund ranges allow extensive choice for the consumer, even within a tied product range or single platform solution.”
The firm believes the FSA’s proposals in the interim report are a backward step compared with the plans contained in the original RDR discussion paper last June.
It says: “We urge the FSA to take a broader view of consumers’ need for advice and how the service they receive can be upgraded and made more widely available.”