Fears among some advisers proposals in the Financial Advice Market Review report would damage the financial planning part of their service have been calmed by the Financial Conduct Authority.
The FAMR report, published last month, redefined regulated advice as anything leading to a personal reccomendation, in a bid to encourage cheaper, guidance-only services which won’t offer bespoke advice and so avoid the same level of liability.
Following the announcement, Kusal Ariyawansa, chartered financial planner at Manchester-based Appleton Gerrard, raised concerns if regulated advice was redefined as based on a personal recommendation, this would affect “quite a few” people providing financial planning, which is currently unregulated, when they make personal recommendations.
He said: “If you’re a planner, that’s going to be classed as a personal recommendation.”
“The key thing is to help those in need. We will help people if they need help. We have a duty of care but then I don’t want to be slapped. We want certainty from the regulator that we did our job and gave the explanation,” Mr Ariyawansa said.
But a FCA spokesperson calmed fears of unintended consequences on planners.
“Financial planners should not be prevented from undertaking their financial planning activity by proposed changes to the regulated activities order. Firms need to ensure they meet their regulatory obligations and these will depend on the nature of the service offered.”
We want to help and have a duty of care but then don’t want to be slapped. Kusal AriyawansaTony Larkins, managing director of Beacon Wealth Management, said: “What the FCA said sounds logical. Whether you’re giving advice or guidance to anyone, you’ve got to be aware of the facts.
“We need to know those things if we can give advice but we don’t want that to be seen as advice in certain circumstances, so the FCA response seems to be OK..”
Robin Keyte, a director of Keyte Ltd Chartered Financial Planners, said the FCA statement was “reasonable,” adding: “They are quite a reasonable bunch although quite a few may not share my view.
“My view on FAMR is it should help advisers and planners deal with consumers. And any changes to regulations as a result, if they do occur, will hopefully be along helpful lines. Certainly when the regulator consults on any changes it will be important to consult with the industry along helpful lines, otherwise it would be counter-productive.”
