Advisers have expressed concern about offering streamlined advice, despite guidance from the Financial Conduct Authority.
This month the FCA published a guidance consultation on a series of issues which came out of the Financial Advice Market Review.
These include streamlined advice, and the FCA has now published guidance to give firms confidence to provide this limited form of advice as a service.
But advisers have expressed concern that providing a personal recommendation which is limited to one or more of a client’s specific needs - has the potential to store up complaints for the future.
Scott Gallacher, director of Leicester-based Rowley Turton, said: “Our general view is that we are fully qualified chartered financial planners so our approach is that people should get full advice.
“We have seen cases where the Financial Ombudsman has said there is no such thing as streamlined advice.
“I see a lot of risks and I cannot see what’s in it for us as financial advisers and in several years time it will come back to bite someone.”
Peter Matthew, managing director of Cornwall-based Jacksons Wealth Management, said if a client came to him wanting one thing, without considering all other aspects of their finances, he would probably turn them away.
He said: “They are clearly not serious about their finances. There can been a striking difference between what the client thinks they need and what they actually need.
“I don’t understand how anyone can advise on a single issue without knowing the wider situation. We would still be liable.”
The FCA has stated firms offering streamlined advice can only collect information that is necessary to provide a suitable recommendation, but they have been warned this does not allow them to lower the level of protections they owe to their clients.
For example clients buying an investment product need to be asked about their level of indebtedness and access to liquid cash.
But the FCA has refused to be prescriptive about what information a firm should collect when carrying out streamlined advice.
Simon Webster, managing director of Kent-based Facts & Figures, said: “The problem for advisers is really that you are going to get pinged as much for the advice you don’t give as for the advice you do give.
“If you don’t at least nod towards to fact that someone doesn’t have a product such as protection then you are not advising you are order taking.
“In reality we do focused advice all the time if someone wants something in particular but our suitability reports say we have looked at everything buy the client wouldn’t pay for it.”
But Patrick Connolly of Chase de Vere said streamlined advice could have a role to play and his company is looking at it.
He said: “Streamlined advice can have a role to play although those giving this advice must ensure they are able to offer it in a way which is in clients’ best interests and meets the regulatory requirements.
“We do provide some streamlined advice.
“We will adapt our advice proposition to the requirements of our target clients and so may expand this in the future if it is what our target clients want.”
damian.fantato@ft.com
