The ABI is calling on the FSA to provide more clarity on how a 'simplified advice' process would work post RDR and in particular the level of qualifications needed for the distribution stream.
In its reponse to the FSA's RDR Consultation Paper, the trade body warns consumer access to advice could be reduced if the financial services industry adopts all of the changes in the RDR.
It says its own "simplified advice process" targets a large group of people in danger of being failed by the FSA because they fall through gaps in the current proposals on cost and complexity of advice grounds.
However, uncertainty about how 'simplified advice' would be judged by the FSA and the FOS, and current FSA proposals requiring everyone applying the process to be qualified to QCF Level 4, are preventing companies developing the simplified format.
The ABI says: "We believe [Level 4 qualification] is an unnecessarily high qualification level for an individual facilitating a simplified advice service, as they would be restricted to guiding the consumer through the pre-determined process, with no freedom to influence the recommendation."
'Independent' status post-2012 also requires greater clarification, says the ABI.
It believes clear guidance is needed on the range of products advisers must consider to be labelled as 'independent', and how it relates to platforms.
"For example, is it possible for an IFA to use a single wrap if they have the ability to consider products and funds not available on this platform?"
Maggie Craig, the ABI's director of Life and Savings, says: "We have come a long way on the road to developing a clearer and more transparent advice market.
"However, as we get closer to the introduction of RDR reforms in 2012, the FSA must realise that firms need clear rules and guidance now. Given direction, firms can develop simplified advice processes, ensuring as many people as possible have access to financial advice."
The ABI also repeated its calls for the proposed RDR changes not to be automatically applied to the protection market.
"The RDR was developed to tackle problems in the investment market, which do not necessarily exist for protection business. Applying some of the RDR changes to the protection market would have an immediate and significant impact on consumers' ability to access advice on these products," it says.
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