View more on these topics

Wheatley: Simple plans to bridge advice gap

Financial Conduct Authority chief executive designate Martin Wheatley says he hopes simple products and simplified advice will bridge the advice gap for people with small pension pots after the RDR.

Speaking at an Age UK event in London last week, Wheatley said: “Charging for advice is there today, it is just hidden. It is right that in a model where charging is made more explicit, people with relatively low-value assets may not have access to the same advice they had in the past. What we are hoping to see is more simplified products that can be sold on a simplified advice or non-advised basis.”

A steering group set up by the Treasury to help develop simple products began work last month, led by former FSA director and former Lloyds Banking Group chief risk officer Carol Sergeant. The group will report by the end of July.



Lenders lobby FSA to get round MMR advice plan

Lenders are believed to be lobbying the FSA to exempt hundreds of their call centre staff from having to be CeMAP qualified to offer advice. The FSA’s final Mortgage Market Review consultation paper specifies that brokers and lenders will no longer be able to offer customers mortgage products on a non-advised basis. Under the proposals […]

L&G’s Hodges cuts back on gilts in dynamic bond fund

Legal & General fund manager Richard Hodges has cut the £1.5bn dynamic bond fund’s exposure to gilts and added to financial debt amid concerns that gilts will not offer value in an upturn. Hodges has cut his gilt exposure from 20.7 per cent to 17.7 per cent since November and added that exposure into financial […]


Tax committee chair warns Chancellor on pension ‘guesstimates’

All-party Parliamentary group on taxation chair Ian Liddell-Grainger says the Government should refrain from making any changes to pension tax in the Budget and should instead hold a formal review. There has been speculation about changes to tax relief and contribution limits in next week’s Budget but Liddell-Grainger warns Chancellor George Osborne should not make […]


Annual allowance cut would be another blow to DB schemes

Chancellor George Osborne was been warned that any move to further cut the annual allowance for tax privileged pension saving could drag “huge numbers” of defined-benefit scheme members into the reporting requirements. Speculation has been mounting ahead of next week’s Budget that the Government will reduce the annual allowance from the current level of £50,000. […]

2016 Global Survey of Individual Investors: How is investor behaviour rewriting the job description for financial professionals?

Trapped between expectations for near double-digit returns and strong apprehensions about investing in persistently volatile markets, investors worldwide are of the opinion that professional financial advice is worth the fee. But even though they believe individuals who work with a financial professional are more likely to achieve their goals, investors have a clear vision of […]


News and expert analysis straight to your inbox

Sign up


There are 9 comments at the moment, we would love to hear your opinion too.

  1. At least he has the decency to admit that the lower icnome bracket WILL be hit by RDR by having reduced or no access to advice. Are you listening Hector? Do you see what you and your colleagues have done with this farsical creation? If only you had listened to industry and advisers about the blatently obvious maybe you would have
    had the sense to rethink the whole idea of RDR. Before anyone says to stop moaning I am currently RDR ready.

  2. You are a bit late in this statement. With only a few months to go why are they hoping that after RDR something can be done to sort this out? Surely it would have been common sense to ensure that this there was something in place BEFORE RDR so that these people are not left out in the cold. I can see it now – there will be so much empahasis placed by FCA on us to ensure they get their fines out there to show their teeth, that it will be years and years before this is being revisited. Eventually it will be the case that they will see it isnt working but will say ok we got it wrong buit its here now so we should stick with it. Advisers RIP.

  3. It is the same old arguement about ‘simplified products’. Most ‘ordinary’ people are put off seeking advice from IFA’s because they believe it will cost them money in fees. RDR will only reinforce that view. Term assurance is a very simple product which can be purchased via the internet or even a supermarket checkout and yet I am staggard at the number of famlies where the main wage earner is not covered by this type of simple plan. WE NEED MORE ADVISERS!!!

    At the begining of the 90’s it was estimated that 45% of all insurance policies were sold by a home service company. They delt with mainly simple products, the FSA managed to regulate them out of business and RDR will have a similar but not so dramatic effect.

  4. delusional – thinking that making financial services products simple and cheap will make people want to buy them.

  5. Here we go, anothr nut job in his ivory tower telling us what we should be doing to help the poor disadvantaged consumers. We run businesses, we do not belong to charitable organisations and don’t work for nowt.

    RDR commission ban is probably the worst solution to the problem of motivating consumers to save

  6. Sugar & Salt are both very very cheap.

  7. Wheatley said: “Charging for advice is there today, it is just hidden. It is right that in a model where charging is made more explicit, people with relatively low-value assets may not have access to the same advice they had in the past. What we are hoping to see is more simplified products that can be sold on a simplified advice or non-advised basis.”

    Hoping to see?! Jees, give me hope!

  8. Simplified Advice is a nonsensical proposition – nobody wants it from other professions such as legal or medical and no one will want it from IFAs either. As for simplified products, we’ve been down this road before and if we don’t learn from experience, we are completely wasting our time.
    If IFAs are going to provide a professional service, then they should have no qualms about charging for it. The fact that some people cannot afford to pay for it is a completely separate issue and one the FSA should be focusing on, rather than desperately trying to bung the square peg of simplified advice into the round-hole of holistic financial planning.

  9. Simplified products are already available from NS&I and in the form of plain vanilla LTA. Even ISA’s are relatively simple, notwithstanding the FSA’s obsessive preoccupation with hidden charges. Yet still there are massive savings and protection shortfalls.

    People such as Mr Wheatley talk blithely about a few more simple products bridging these gaps, yet nobody seems able to come up with any ideas for what they might actually look like, least of all the FSA which has already been kicking this particular can around for at least a year. Just what white rabbits that nobody else has managed to devise do Carol Sergeant and her team expect to pull out of the hat?

    Probably the most critical shortfall is saving for retirement, yet the government has done NOTHING WHATSOEVER to honour the Conservatives’ pre-election manifesto pledge to simplify pensions ~ in fact, it’s done quite the opposite.

    NEST certainly isn’t the answer, not least because it’ll still be governed by the dreadfully complicated rat’s nest of rules governing every other type of retirement savings arrangement. The mindset of the general public, at least the non-HNW sector, has been totally poisoned against anything and everything to do with pensions.

    So tell us, Mr Wheatley, how can you talk about (more) simple products being the solution to everything when nobody’s yet managed to come up with any? The simple facts are:-

    1. Providers and advisers are commercial organisations that have to make a profit to survive.

    2. All products are subject to a legislative framework devised and imposed by civil servants and by a regulatory framework devised by the FSA.

    3. Because the FSA perniciously denies advisers the protection of any longstop against future complaints, advisers are liable indefinitely for any advice they give.

    4. No investment products, except those offered by NS&I, which we already have, offering the potential for returns ahead of inflation, are or can ever be risk-free.

    5. The returns available from NS&I products are generally so pedestrian that they fail to excite, whilst none offers a monthly savings facility. Even the sporadically available index-linked savings certificates offer nothing more than a guarantee not to lose money in real terms.

    So just what products can ever overcome such a combination of obstacles? it will be mildly interesting to see what’s announced at the end of July, though I anticipate that at best all we can expect is a couple of damp squibs that providers won’t be interested in marketing, that advisers won’t be interested in advising on and for which consumers won’t be interested in paying fees.

    Did consumers rush to invest direct in profitless personal pensions (a.k.a. stakeholder)? No.

    Did providers who tried to market them in the hope that compulsion would lead to economies of scale achieve anything but massive losses of money? No.

    Did advisers seize on them as the next big thing on which to build sustainably profitable businesses? No.

    All I see ahead is yet another massive waste of time and OPM to come up with yet another Great White Elephant.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm