AIFA has called for greater understanding of how 'advice' and 'sales' channels can work in tandem rather than fight each other post-RDR and repeated its plea for a 15-year long-stop on complaints.
In a section entitled Advice and Sales "Working Together", AIFA warns the RDR has been misinterpreted by many commentators who have suggested there will be a polarized market of 'advice' versus 'sales' in which consumers would be locked in to one or the other.
The report argues: "It should also be made clear here that we see "advice" and "sales" as two sides of the same coin; that they can and should be supportive and increasingly leverage better consumers outcomes."
It says the two channels could provide mutual support, providing shared skills and generating better outcomes for consumers if constructed properly.
AIFA also dismisses the 'myth of scarcity' that all financial services companies companies are fighting to serve a shallow pool of consumers as it believes an improvement in trust will lead to more consumers engaging with the industry.
It sees three main groupings for the new landscape for retail financial services: Money Guidance, Advice and Sales which would all feed into each other.
The Sales group would be sub-divided into 'Sales without persuasion' and 'Sales with persuasion'. The first would allow consumers the choice to buy direct, via a simple self-selection method while the latter would allow tied or multi-tied firms to serve clients not looking for full financial advice.
AIFA rejected the 'sales adviser' tag mooted in the RDR Feedback Statement as 84% of consumers it surveyed said it would be confusing. Instead, it prefers titles such as 'Salesperson', 'Financial Representative' or 'Sales Consultant'.
On the subject of remuneration, AIFA suggests terminology should be standardized and a further distinction made between;
'Adviser charge'-The agreed remuneration basis that the advisory profession works on, including the upfront advice fee for analysis and recommendation; and a "recurring fee" for the cost of on-going advice
'Product costs'- The full cost of the product recommended/sold by the different market participants
AIFA also re-iterated its calls for an introduction of a 15-year long stop on complaints against financial services firms.
It cites YouGov research which shows 73% of consumers believe there should be a time limit for advisers to be legally responsible for advice, of which 23% say the time limit should end when the relationship between the IFA and client ends.
The report says: "We do not recall any occurences of products becoming 'toxic' which did not happen within a 15-year period and believe that it is, ultimately, in the interests of consumers to introduce a long-stop."
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019