The British Bankers Association (BBA) has written to FSA CEO Hector Sants proposing a "simplified advice" model for the mass market, which it says would fill an advice gap left by the RDR.
BBA chief executive Angela Knight warns Sants the RDR's aim to create a market "which allows more consumers to have their needs and wants addressed" is in danger of not being met by the reforms.
Instead, it is pushing the simplified advice model as a solution. This would focus on meeting "straightforward" savings, investment and protection needs more cost-effectively than full advice.
The model would be tailored for smaller transaction sizes in a highly automated service, but would still deliver suitable, personal recommendations to customers with acceptable risks and safeguards, the BBA says.
"Suitably" trained and supported "facilitators" would deliver the service but they would not have the discretion to alter the recommendations provided by the model.
BBA chief executive Angela Knight says:"We are concerned advice will be written off as too time-consuming, expensive and complex by the very people who need it most, unless an alternative to full advice emerges."
The BBA's simplified advice will provide the safeguards that consumers need, while delivering effective advice at a reasonable cost, she says.
IFAs have long warned the increased regulatory burden being placed on the advisory sector will send the cost of independent advice soaring. They fear this would then drive consumers to banks whose staff can only advise on a limited range of products.
IA sectors – help or hindrance?
Despite multiple complaints
Annuity market worth £4bn in 2017
For ‘distress’ caused
Oversees £30bn of advised and D2C assets