Simplybiz has ruled out offering specific services to support the new model of advice proposed in the Financial Advice Market Review, as it joins a number of industry players questioning demand for the change.
The final report, published earlier this month, recommended fresh consultations by the government and regulator on a proposed new model of financial advice.
Under a revised definition of what constitutes advice, firms would be able to offer services that guide consumers toward their own investment decisions without taking on the same liability and regulatory criteria required when giving a personal recommendation.
But Matt Timmins, joint managing director of SimplyBiz, questioned whether there would be demand from firms for this new type of advice.
He said: “The FAMR final report recognised the value of personal financial advice, and supporting firms providing this advice to consumers has always been – and will always remain – at the heart of what the Simplybiz Group does.
“We do not anticipate receiving a huge demand for solutions surrounding the proposed new definition of advice from our member firms and therefore it is not something which we have factored into our short term plans.
“The Simplybiz Group provides services to advisers who, in turn, provide personal advice to their clients and this remains the ongoing focus of our time, energy and resources.”
Aimed at finding ways to bridge the ‘advice gap’ suffered by people who would benefit from advice but can’t afford it, FAMR looked at ways firms could be encouraged to return to the provision of mass market advice.
The subsequent report stated a number of firms do not have the confidence to develop advice services to meet simple consumer needs, meaning consumers who want to receive this kind of support are either left without it, or are required to pay for full advice.
Strict FCA definitions of regulated advice have been a particular frustration for technology providers, such as Distribution Technology, which said two of its clients put their plans on ice because of uncertainty over this issue, and SEI, whose UK managing director said it was slowing down decision making.
Distribution Technology managing director Ben Goss welcomed the changes to the definition of advice in FAMR, prediciting it would have a massive impact on the maket and lead to robo-advice becoming the norm in three years.
But David Harrison, managing partner at True Potential, said the proposed new advice model would be unattractive for firms which do not use extensive technology.
“Our advisers already have the tools to provide this hybrid service, meaning clients can help themselves in a safe environment. The adviser can see what they are doing and is there to help, but the client can make the decision themselves.
“I doubt many private firms will want to follow the expensive public guidance models of simply listing options.
“The best way to deliver that type of service is through technology that is more than a fund supermarket and gives consumers the information to make good decisions.”
Tenet’s group brands director Mike O’Brien agreed technology would have a role to play in delivering advice.
“The FAMR recommendations are very high level at this point and until the consultation process has run its course, it is too early to reach any solid conclusions from an advice liability or commercial viability perspective.
“That said, Tenet supports any initiatives which will help people to make better-informed investment decisions. But the cost of delivering advice must not outweigh any potential benefits to the consumer.
He added: “I believe we should learn from past experience and test out the potential labels on the general public, so that we use terminology that ensures they understand the service they are paying for.”
Speaking after the launch of the FAMR, the FCA’s interim chief executive Tracey McDermott said that while she did not anticipate “a flurry” of new guidance firms being set up to deliver this new type of advice, there would be demand.
A spokesman for the FCA said there is not currently a set date for when a consultation inot this area will start.
