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This year, I have been heavily involved in the area of financial capability. When I was heavily (albeit constructively) critical of the pilots for phone-based guidance, I expected to be dismissed as a spoiler but to the credit of the Treasury team, my aversion for brown- nosing led to a one-to-one debrief which they genuinely appreciated, as evidenced by my presence at the FSA/ HM Treasury summer school.

The core theme of my comments/opinion is that the public seek impartiality, balance and expertise. We may call it guidance information or advice but they call it advice. As I am sure the FOS would agree, what we (regulator or firm) call a service is irrel-evant. Advice is defined by the recipient, not the supplier or anyone else.

On several occasions in 2008, I have found myself addressing advisers and others from other countries on how UK regulation impacts on the role of the professional adviser.

Having studied the webcast of the FSA RDR conference, I am wondering just how I can easily explain the proposed market structure for the provision of advice. Before anyone suggests using the FSA Venn-like diagram, just remember how many people at school managed to understand Venn.

We have to ensure that the labels really work and to do so we need to use terms that the public already identify with rather than hang on to those we personally prefer. Ironically, the term planner is possibly the one we can use as long as it is controlled. In last weekend’s papers, one bank called its multi-tied operation financial planning. This is farcical and yet easily sorted. If any firm wants to label itself financial planners/ planning, they have to have had the firm and its planners accredited to ISO 22222.

Having started at the top, let us descend. Advice has to be impartial so it has to be independent, with no contingent sales. Let’s be radical and call them independent financial advisers.

Now if you are not independent, you are not impartial, so you are a salesperson. For example, the public know that double-glazing salesmen are not on their side so why should we kid on that someone in a bank is? The idea that sales advice has to be there to keep the EU happy is rubbish.

We should be leading the EU. So far, the FSA has played the role of lapdog. We saw that with the IDD, where we had multiple versions with no common layout. Did we lobby the EU or just meekly say thanks? When we were Mifid- ready as a country, only two other countries were ready and one of them was Bulgaria.

Moving on, the public need guidance but they would see that as advice. What they often need is validation, where they can check that their current thinking is OK. Perhaps validation is not the best term perhaps. Checking is better.

Finally, it is best calling it education which is making people financially capable so we then have a proper order with titles that mean something.

  • Education from Money Guidance
  • Checking from Money Guidancel Sales from banks and multi-ties
  • Advice from IFAs
  • Planning from planners

    It is simple. If the banks cannot market honestly and transparently, they should not transact at all. We need a simple message and a professional approach. At all levels, we do not need labels that confuse.

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