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23 July, 2014   |   By Donia O'Loughlin FT Adviser   |   Market News

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FCA’s simplified advice stance not in consumer interest

Following a meeting with Steve Patterson, MD at Intelligent Pensions, the FT Adviser wrote a story about the FCA's simplified advice proposals to not allow independent advisers to offer simplified advice.

The FCA paper said: “If a firm provides simplified advice (which is restricted advice) in addition to independent advice, it should not promote itself as a provider of independent advice for its business as a whole (nor would it be appropriate for the firm to include the word ‘independent’ in its name).”

Steve Patterson commented: “When people are looking to make financial decisions, many are turning to the internet for information and guidance, so being able to package this in a simple and user-friendly manner will certainly help attract new clients.

“It would appear that the only way that IFAs can play a part in the streamlined online advice process, that is the fastest growing part of the market and delivers advice cost effectively to consumers, is that they cease to be IFAs.

“This seems incongruous and for firms who rely upon their independence as a key aspect of their business proposition, for example to maintain relationships with other professional firms such as solicitors and accounts for client referrals, an unnecessary imposition by the regulator.

“That cannot be in the interests of consumers and the FCA should adopt a more flexible stance.

“General IFAs are general practitioners and while they must be willing and able to advise in all areas, that shouldn’t mean that for more complex cases they run the risk of losing their independent status by bringing in another firm that has the specialist expertise and experience.

“The consumer seems to be the main loser in this overly prescriptive regime.”

For the full story, please click here.