It is crucial that people grasp the “value of this guidance”, the TSC report says. The committee recommends that the full average cost of the provision of the guidance by firms should be estimated and disclosed to consumers”.
Research by the National Association of Pension Funds signalled that the regulated advice sector looks likely to miss out on the pension saving surge as respondents said they would not be prepared to pay for full financial advice.
The Association of Professional Financial Advisers warned that “a lot of people still want the face-to-face service, adding that there is a “challenge for our sector to become more efficient and reduce the cost of advice”.
The FCA is currently working with trade bodies and others to draft rules governing how the guidance guarantee will operate.
Earlier this year the regulator said it is undertaking work to ensure regulation does not limit innovation in online forms of advice.
Giving evidence to the Treasury Committee in February Martin Wheatley, chief executive, highlighted the real concern is that consumers cannot make a distinction between a product which is “advised on the web and execution-only on the web” .
The FCA said: “We are spending quite a lot of time talking to the industry about whether we need to revise our guidance to make products fall very clearly into one class or the other.”