There is a major risk of banks undermining the value of advice because of proposals made in the Retail Distribution Review, warns Ivan Martin, executive chairman of Sesame.
Martin also blamed banks for Britain’s spiralling debt problems and widening savings gap.
Speaking at Sesame’s first annual Symposium in London, Martin says: “I must admit that I am extremely concerned about the prospect of banks being allowed to brand basic information as ‘advice’.
“I am concerned that the British public will have been misled and unfairly treated if they are put in a position where, in an attempt to clarify types of advice, confusion reigns.”
He says that while advisers are attempting to raise standards, the banks are undermining the value of professional advice by claiming they are offering advice.
RDR proposals for primary and generic advice systems could benefit banks, allowing them to exploit customers with less regulated forms of advice, according to Martin.
“Banks only do one thing; they sell products to whoever will buy them. They always have and, I am afraid to say, I think that they always will.”
Martin also called on banks and credit card companies to face tougher regulation and scrutiny because of irresponsible lending practices.
“Britain is counting the cost of a buy now, pay later culture that spans an entire generation,” explains Martin, “It’s a culture that has been sustained by banks, and other financial institutions, wantonly ignoring the fundamental issue of an individual’s ability to afford debt.”
Martin says Sesame supports appropriate and proportionate regulation for both banks and financial advisers.
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