Questions around the actual size of any target market and the problem of charging fees could hamper the success of simplified advice, according to Zurich UK Life's Matthew Connell.
In its recent guidance on the issue, the Financial Services Authority(FSA) said the market "may not be as large as many in the industry suggest", citing research showing 49% of the population does not even have enough money to cope in an emergency.
Connell, Zurich's head of government and industry affairs, said the provider's own research has indicated only a third of consumers would be suitable for simplified advice.
"If you take away people who haven't got income for a rainy day, those who only need savings or protection and people at the top of the market who need full advice, you're filtering out two-thirds of the market."
He also said consumers would also be reluctant to pay for the advice element through any automated system and suggested the FSA would not let any providers offer it 'free', as there would ultimately be a cost involved.
"Consumer groups would question how free the service would actually be and advisers would think it is unfair," he said.
Connell was also wary of the systemic mis-selling risks which may be posed by the automated nature of any simplified advice service.
He said: "If you sell something and it doesn't show up in stress testing, you can't just say it's a one off.
"You're left in a position where there is evidence that if one customer has been affected there will be a whole lot more."
The provider, which is set to roll out corporate and retail platforms by the end of the year, said it has no plans for any simplified advice offering and would instead concentrate on existing intermediary channels.
For more on simplified advice see this week's Professional Adviser.
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