The FSA's Retail Distribution Review (RDR) is confusing the concepts of ‘advice' and ‘information' to the ultimate detriment of consumers, John Gummer MP says.
Speaking at Sesame’s first annual Symposium conference, Gummer, chairman of the Association of Independent Financial Advisers (AIFA), says advice fulfils an important role, over and above that of information, in ensuring customers choose the right products to meet their needs and aspirations.
Speaking at today’s conference, Gummer says: “In the RDR, the FSA is treating the word ‘advice’ as though it were interchangeable with ‘information’. I agree that we need to give people the widest possible access to information.
“However, when it comes to choosing between two things that you have information about, that’s when advice is needed and it’s important to get independent advice.
"If customers read information and think it means they’ve received advice, then they could end up in a lot of trouble.”
Gummer also says it is important advisers are given the time to give advice to their clients, rather than spending much of their time reading FSA reports and bulletins.
“The FSA needs to realise that many businesses don’t employ one person who purely looks at FSA statements," he says.
"While regulation is important, if an adviser spends more time on it than he does with his clients, then he has no business.”
Gummer also repeated criticisms made at AIFA’s annual dinner - that the European model of regulation is superior to that in this country - and said there needs to be an end to the gold-plating culture in the UK.
The National Audit Office’s decision to review the FSA’s performance on a regular basis met with his approval, he told delegates.
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