Consumers will be confused and alienated from financial advice due to the multiple distribution streams proposed in the RDR, experts say.
Insurers are worried attempts to divide the advice and distribution sector into various streams, including sales advice, guided sales and execution with information, will have a detrimental effect on customer understanding of the industry.
The RDR Feedback Statement proposed a number of new streams of financial advice and distribution, which create a complex landscape when combined with existing business models.
Current proposals suggest there could be as many as six different distribution channels, ranging from execution-only to independent advice, with many variations in between.
Andy Curran, director of intermediated distribution at Prudential UK, says: "Right now there are too many advice streams in the RDR, and the man in the street doesn't know the difference between all these channels."
"A lot of people will think guided sales and sales advice are the same thing, when they could be quite different," he adds.
Richard Howells, intermediary sales director at Zurich, agrees, and is worried about the impact the changes will have on consumers.
"The market is becoming increasingly complex and confusing, but confusion doesn't help the consumer," he explains.
"In the past we had independent advice and tied advice, which was easy for customers to understand, but we risk turning them away from financial services if they don't know where they can get the advice they need."
The FSA says it is still consulting over the potential future of guided sales, and has not yet announced firm plans for the proposed distribution stream.
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