Apfa demands advisers don’t accept status quo
Chris Hannant, director general of the Association of Professional Financial Advisers, told FTAdviser what should be avoided in terms of outcomes in the Financial Advice Market Review is the “refusal to contemplate change”.
With just days to go until the 22 December deadline for advisers to comment on what can be done to boost adviser numbers, Mr Hannant said advisers must avoid “the acceptance of status quo”.
He added there is a “need to recognise the harm caused to the many who cannot afford to access advice.”
Mr Hannant said that amongst the potential solutions which may arise from Financial Advice Market Review, is the need to address the costs of delivering advice.
Additionally, he said that the need to address the fact that a full advice process should not be needed to help people obtain some simple products, for example stocks and shares Isas, which are almost suitable for anyone.
Mr Hannant added if there is some simplified process for a defined set of basic products, the industry would need reform of the Financial Ombudsman Service to ensure market confidence.
He also said that Apfa believes that separating appeals from the first hearing needs to happen as in other judicial processes.
Speaking about how these will benefit financial advisers and the advice market as a whole, he said: “Reduction of costs and liability will enable advice to be delivered at a lower cost and so more attractive to more people.
“A simplified process would enable more consumers to get basic help and provide route to encourage more saving and way of bringing fresh blood into the profession.”
For the first time in a decade, the regulator confirmed back in October that it will reconsider the unlimited liabilities advisers now face as part of the FAMR.
The FCA acknowledged there are relatively few awards by the Fos made against financial advisers in response to complaints about incidents longer ago than 15 years (which would be likely to be barred if a long-stop were in place).
According to the FCA, options to improve access to advice could include: encouraging advice in accessible locations like libraries or post offices, supporting the development of online advice and sharing the costs of advice with employers, or subsidising the cost.
The FAMR review is also consider whether the government could work with industry and employers to enhance awareness through methods such as sign-posting or public information campaigns.
So-called ‘robo-advice’ is also on the menu of options.
ruth.gillbe@ft.com
