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Topics: BBA| IFA| Angela Knight| Hector Sants
The British Bankers Association (BBA) has written to FSA CEO Hector Sants proposing a "simplified advice" model for the mass market, which it says would fill an advice gap left by the RDR.
BBA chief executive Angela Knight warns Sants the RDR's aim to create a market "which allows more consumers to have their needs and wants addressed" is in danger of not being met by the reforms.
Instead, it is pushing the simplified advice model as a solution. This would focus on meeting "straightforward" savings, investment and protection needs more cost-effectively than full advice.
The model would be tailored for smaller transaction sizes in a highly automated service, but would still deliver suitable, personal recommendations to customers with acceptable risks and safeguards, the BBA says.
"Suitably" trained and supported "facilitators" would deliver the service but they would not have the discretion to alter the recommendations provided by the model.
BBA chief executive Angela Knight says:"We are concerned advice will be written off as too time-consuming, expensive and complex by the very people who need it most, unless an alternative to full advice emerges."
The BBA's simplified advice will provide the safeguards that consumers need, while delivering effective advice at a reasonable cost, she says.
IFAs have long warned the increased regulatory burden being placed on the advisory sector will send the cost of independent advice soaring. They fear this would then drive consumers to banks whose staff can only advise on a limited range of products.
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| Comment | Banks urge Sants to back 'simplified advice' model |
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Simple does not mean sales
I agree with the first commentator. By removing regulation, the FSA could facilitate an efficient but still advised, whole of market service for the masses. The worst outcome would be for the majority to be forced to use tied and monthly targeted salesmen for their financial solutions. When oh when will the the FSA act on the blindingly obvious principle that anyone who has to meet a sales target each month will inevitably be pressured into remuneration rich solution rather than the best for the client. This just isn't TCF!
Posted by: Simple Simon
I WONDER WHY, ANGELA?
This woman has just realised that her air-head advisers at the banks are only able to offer simplified advice. I guess lispy-old Hector would reply as follows; My Dear Angela, Pleeth don't worry. The F eth A are doing all they can to protect the numbthkulls in your employ. We recognithe that they cannot cope with anything more complekth than an ITHER, and even thath puthing it a bit. Retht atthured, you can carry on meeting your targeth for thtupid little thales, and your bonuthes will continue to be paid and thith way you can altho continue to hold George Othbourne to ranthom. Love and protection, Hector
Posted by: Cynical Bloke
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HOw convenient....
...it will be if the solution to the problem caused by RDR happens to favour the banks. good job Im not a conspiracy theorist... A far simpler solution(and much better for consumers!) is to reduce the regulatory burden and simplify the advice processes for such "mass market" advice areas, and then independent firms that choose to do it will be able to provide independent advice at a cost effective price. Widest possible affordable consumer choice always works best.
Posted by: Paul Harding