Can we honestly say the FSA had a real appetite for simplified advice? Should advisers be glad it seemed not to?
I ask because, judging by the FSA's final guidance on simplified advice, it is now even more unlikely to be the solution to the so-called 'advice gap'.
It was a classic consultation process by the FSA: plenty of stakeholders communicated their concerns and suggestions but, in the end, it simply stuck to its guns.
So why is my glass completely empty when it comes to simplified advice?
Did the bell just toll for simplified advice?
From discussions I've had with interested parties, there seemed to have been two key problems for firms thinking about developing simplified advice models.
Firstly, simplified carries the same suitability standards and complaints processes as full advice. Given the considerable fines the FSA has handed down in recent years, plus the fact that automated systems - the most likely route for simplified models - could lead to mass consumer detriment if they fail, the risks are just too great.
Secondly, the FSA's guidance could mean millions being automatically kicked out of the process because they are, like most of us, in debt. Throughout its guidance, the FSA stresses time and again that firms would need to ensure they don't sell investment products to people who should be repaying debt or building emergency savings pots.
As has been well-documented in recent years, us Brits are no strangers to unmanageable levels of personal debt, while to many saving for a rainy day is an alien concept.
Considering many firms were looking to large scale and small margins to make simplified advice work, this is a big problem.
So what now for the advice gap? The Money Advice Service has been touted as one route, but increasingly its focus is on debt and, with no regulated advice involved.
Meanwhile, the development of simple products is focusing on deposit accounts and protection, while basic advice concerns stakeholder products only.
However, there is one area where we know plenty of providers and manufacturers are working hard.
At a Marketforce conference I attended yesterday, there was clear appetite for execution-only services and barely a week seems to go by without some news on a platform developing a D2C proposition.
Listen out for plenty of noise over the next few years about catering to the mass market and embracing technology. Just don't expect to see the words 'simplified' or 'advice'.
Due to leave 31 May
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