Regulation  

Networks question need for FAMR’s advice model

Networks question need for FAMR’s advice model

Networks have questioned whether there will be any demand for the new model of advice proposed in the Financial Advice Market Review.

The final report, published earlier this month, recommended fresh consultations by the government and regulator on a proposed new model of financial advice.

This would allow firms to offer services that help consumers make their own investment decisions without a personal recommendation.

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But Matt Timmins, joint managing director of SimplyBiz, which has launched an academy to help advisers who want to move into the corporate market, questioned whether there would be demand from firms.

Mr Timmins 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 we have factored into our short-term plans.”

The FAMR report stated that a number of firms do not have the confidence to develop advice services to meet simple consumer needs, meaning that consumers who want to receive this kind of support are either left without it, or are required to pay for full advice.

The definition of advice has 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.

David Harrison, managing partner at True Potential, said the proposed new advice model would be unattractive for firms that 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.

“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 that technology would have a role to play in delivering advice.

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, there would be some demand.

A spokesman for the FCA said there is not currently a set date for when this consultation will start.