A new standard in financial planning will help bring together a fragmented industry - including restricted and bank advice - its creators have claimed.
The BS 8577 ‘framework for financial advice', accredited by the British Standards Institute (BSI), launches this summer, following an industry consultation. A similar standard, ISO 22222, has been adopted mainly by small IFA firms.
The standard has been developed with industry and consumer representatives, including the Chartered Insurance Institute (CII), Which?, the Personal Finance Society (PFS) and the Institute of Financial Planning (IFP).
The Financial Services Authority (FSA) had also been consulted, and could look favourably upon accredited firms, said BSI's head of market development Dan Palmer.
"We think the FSA is less likely to find problems at firms who have the standard," he said. "Whether they decide to recognise that or not is a decision for the FSA, but that's what all our experiences of standards in regulated environments point to."
Previous attempts at standardising the industry had failed because of an unwillingness to tackle all types of advice, he said.
"Like any new innovation, you always have early adopters. But we think with this it's written specifically so it's as easy for a large firm to use as a small firm, which wasn't true of [previous standards].
"Gradually it will become standard practice, but it's not an overnight thing - it will build over time."
Nick Fleming, also from the BSI, said it was important to develop a culture of good practice in banks regardless of whether their advice was independent.
"Some of the organisations we consulted were keen for the independence to come through," he said. "But good advice is that regardless of whether you're offering your own products or not."
The IFP had done well at raising awareness amongst, Palmer said, but lacked the consumer profile of the BSI.
"The CII and IFP have a great reputation within the industry, but not necessarily have that with consumers, whereas BSI is much more of household name."
Successful standards can be interpreted in different ways by different organisations, he continued.
"The services [IFAs or banks] provide are up to them. What we're trying to say is that if you are going to offer advice, these are the things you need to think about.
"Where the banks have been involved in mis-selling you can point to where certain controls haven't been in place. The standard can help with that."
Advisers can find out more about the accreditation HERE.
Regular reminders and updates
9 December 2019 deadline
Joe McDonnell joins as head of portfolio solutions (EMEA)
Adviser of the Year - South East
Fidelity Multi Asset CIO's outlook