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Who's entering the race to offer simplified advice?
by Michelle McGagh on Mar 16, 2011 at 08:34
News that the Financial Services Authority (FSA) has broken the Mexican standoff over simplified advice is to be welcomed.
The regulator's about-turn and statement that it would be publishing simplified advice guidance after consistently refusing to set out guidelines, stating that the industry should create the models for simplified advice, had been a bone of contention.
It had led to a stalemate over simplified advice; the FSA wouldn’t publish guidelines on how it could work within the regulator's rules and interested parties refused to launch a simplified advice model without a guarantee they wouldn’t get stung by the Financial Ombudsman Service if the regulator decided retrospectively the models weren’t up to scratch.
Hopefully this will give the simplified advice channel the shot in the arm it needs and a valuable financial service will be born.
The life companies will no doubt be chomping at the bit to target all the mass market clients out there and once the FSA has laid down the rules, there is no doubt we'll see a swathe of execution-only platforms and tied advice models developing.
But the question is, will simplified advice be the preserve of the life companies and the larger IFAs with money to develop whizzy new systems or can financial planners get in on the act?
Keith Churchouse of Churchouse Financial Planning and Paul Richardson of Concept Financial Planning have expressed interest in this area. The former has developed the planmypension.co.uk website and the latter is working with WealthTime to develop an execution-only platform.
Do you think this is the next big opportunity for advisers and are you going to join the race to give simplified advice?
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6 comments so far. Why not have your say?
Julian Stevens
Mar 16, 2011 at 14:21
Simplified advice on what?
report thisJames Dean
Mar 16, 2011 at 14:26
There is a place for simplified advice, for those with lower wealth, straight forward(ish) needs and the provision of a less complex solution. However, I suspect that many life offices, distributors, etc. will throw technology and 'efficiency' savings at it and completly miss the client experience and the quality of the communication. People still deal with people at the end of the day, so technology can only go so far. I am watching with interest
report thisPhilip Renwick
Mar 16, 2011 at 16:55
This is nuts! Why change a system that has worked well for decades. I`ve been to see clients where they say that they need one thing and it turns out to be another. I still think the FSA have got the RDR so seriously wrong.
report thisJulian Stevens
Mar 16, 2011 at 18:08
To Philip Renwick ~ don't worry about it. If it's that simple, the dispensation of simplified advice can be handed to the CAB. The likes of you and I will just carry on looking after the affairs of clients who need proper advice and who enable us to make a reasonable living.
report thisMike Fenwick
Mar 17, 2011 at 09:35
Michelle ... you ask " Do you think this is the next big opportunity for advisers?"
Where "simplified advice" leads to the purchase of a product, ie, it goes beyond "simplified advice" itself, and that is one of the clear latent dangers inherent in the current proposals from Mark Hoban for the CFEB - then it is more likely to be the next big opportunity for claim chasers.
It won't be immediate, but a few years down the track, it wil happen.
report thisPhilip Wise
Mar 17, 2011 at 12:39
Is simplified advice just another name for "selling a product"?
Or is there something more to it?
Is there a reason why they are using the word "simplified" rather than "simple"? (Simplified suggests that the existence of a more complex piece of advice).
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