AIFA has expressed concern over the FSA's new Money Advice Service, saying it is likely to confuse consumers.
Director general Stephen Gay says the word 'advice' in the title will puzzle members of the public as the service is not permitted to provide 'regulated' financial advice or recommend products.
The industry-funded online and over-the-phone service, which purports to offer "free, clear and unbiased advice", was launched by the regulator earlier this week.
"It concerns me," Gay says. "What the service is trying to achieve is all well and good, but it is called ‘money advice', not 'financial advice'.
"How is the customer supposed to understand the difference? What is the difference between money advice and financial advice? The customer is entitled to ask: ‘Are you advising me or not?'
According to John Gummer, the AIFA chairman, the public will be confused by the service because they understand what ‘advice' entails.
"What the public understands by advice is going to somebody who knows more about a particular subject, who will help me, who is on my side and, most importantly, who will take responsibility for [the advice]," he says.
Earlier this week, IFAonline ‘mystery-shopped' the Money Advice Service in a bid to find out what it can and can not provide. Read what happened HERE.
Meanwhile, AIFA has begun what it calls a "top to bottom" strategic review of the organisation to establish "what it does, what it costs, who funds it and how it adds value".
Gummer says: "We will be asking members and other stakeholders a simple question: How can AIFA best represent IFAs in a world in which a new regulator, Europe and the RDR are the dominating factors?
"The best organisations review themselves before they are forced to. We don't have to do this, but we want to."
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