Tied and multi-tied advisers should consider themselves "very lucky" they may be able to use the term ‘advice' when explaining their offering to consumers.
That is the verdict of Baroness Sheila Noakes, the Conservative Party Treasury spokesperson, addressing British Bankers' Association (BBA) retail policy director Peter Tyler at a meeting of the All Party Parliamentary Group at the House of Commons yesterday.
Tyler had described the term ‘restricted advice' - that proposed by the FSA to make clear to consumers they are dealing with an adviser with ties to one or more product provider - as "pejorative".
"We feel the term 'restricted' could confuse and deter consumers from taking advice," he said. "To us, it seems to reflect the quality of the advice, rather than the limited range of products that can be advised on, and that's not right."
Noakes hit back: "Hasn't a huge concession been made already by allowing that word 'advice' to be able to creep into what banks do at all?
"The superiority of the independent adviser remit must be clearly indicated. You're very lucky not to have to simply call it sales because, until recently, that is what it was going to be."
Until its most recent RDR paper, the FSA had proposed the term 'sales advice' for tied operators.
Tyler added: "Is it not possible for advice given by banks to be better than that given by IFAs?"
All Party Parliamentary Group chairman John Greenway hinted it may seek to change the term 'restricted advice' on the back on Tyler's concerns.
But speaking afterward, AIFA director Robert Sinclair pointed out FSA research found the term ‘restricted' best reflected what consumers felt tied and multi-tied practitioners should be called. However, he added: "We are with the Baroness; they [bank advisers] will be lucky to be able to keep the word 'advice'."
"In terms of the quality of advice offered by banks versus IFAs, I would say a single consumer might end up with an equal outcome by seeing a bank adviser, but it is highly unlikely all consumers will end up with a better outcome," he said. "That's the difference."
Latest news and analysis
Drip-feed. Blend. De-risk
£92bn transferred since 2015
Achievements, charity work and other happy snippets