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Helpful to redefine ‘advice’ around personal recommendation
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Priority is now FCA ‘guidance on guidance’
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Consumer descriptions of ‘advice’ v ‘guidance’ also key
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Consumers must have confidence in genuine sources of regulated advice and guidance
Steven Cameron, Pensions Director at Aegon said: “Redefining and clarifying ‘advice’ is a key step in the broader FAMR journey. Amending the definition to tie it to a personal recommendation makes sense but we need to make sure there is absolute clarity between advice and guidance. For example, where does ‘advice’ to take no action fit?
“Redefining advice won’t itself improve consumer access to the support they need. This will also depend on the FCA definition of guidance and if this leads to market innovation.
“The Financial Advice Working Group is still to set out how it proposes ‘advice’ and ‘guidance’ will be described to savers.
This is critical as consumer confusion over the types of support available, and which best suits their needs, could do more harm than good.
“With the 28 FAMR recommendations being advanced by different bodies to different timelines, we now need clear ownership to make sure they’ll fit back together to address the ‘advice gap’. While individual FAMR measures may offer some consumer benefit, any real step change in consumer support will come only if these work as a package. An ideal outcome would be increased demand for clearly understood advice and guidance services which can be delivered cost-effectively.
“FAMR actions also need to fit alongside any future ban on pension cold calling. We need to make sure consumers are safe from scammers by creating simple ways of identifying genuine sources of valuable advice and guidance from regulated firms.”
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