FSA not taking access to advice seriously - Aegon

The FSA is not taking the issue of widening access to financial advice seriously enough, according to Aegon.

Speaking at a debate on behavioural economics in London today, Aegon's head of corporate affairs, Francis McGee, says Money Guidance has an important role to play alongside regulated independent advice, but fears the mid-market will lose out.

He is joined by MoneySavingExpert.com's editor, Martin Lewis, in calling for new financial advice models to be based on how people think and act in the real world, rather than using traditional models the financial services industry has already developed.

"Aegon believes the FSA's Retail Distribution Review lays the foundations for a more trusted advice system and that Money Guidance has an important part to play alongside regulated financial advice," says McGee.

"However, it remains concerned that the FSA is not taking the issue of widening access to trusted advice seriously enough and that instead we will be left with a smaller advice market."

Lord Lipsey, former chair or the Financial Services Consumer Panel (FSCP), echoed McGee's concerns that some consumers will not be able to access advice they can rely on.

"While greater professional standards in independent advice will undoubtedly be good for those at the top, and schemes like Money Guidance should help those at the bottom, will those in the middle end up being sold financial products by the banks through the contradiction that is 'sales advice'?" Lipsey says.

McGee says the industry needs to develop new models to deal with these problems, which would allow consumers to access financial advice and products in a way that suits them.

"There's too much focus [in the RDR] on existing models, rather than creating a new framework to allow new models of advice and guidance more in tune with what people want."

"We must resist imposing a model that suits the industry," he adds.

Consumer champion Martin Lewis says the industry must go further and look at consumers' most pressing needs, such as the need to balance day-to-day expenditure with long-term saving, if it hopes to provide a trusted service in the future.

"This industry should not be charged with developing advice services for the good of consumers. Instead they should be equipped with the tools and the knowledge to go out there and do it for themselves."

He claims consumers will continue to be served badly and lack trust in advice services for as long as product providers are involved in the shaping of the advice model, and wants the FSA to acknowledge consumers' wants and needs before settling on its vision for the future of advice.

Contact: John Bakie, Tel: 020 7484 9805, e-mail: John.Bakie@incisivemedia.com