FSA yet to decide who will take responsibility but says it will not be IFAs
The Financial Services Authority (FSA) has assured intermediaries they will not be responsible for providing financial information to consumers as part of the Money Guidance (MG) service.
The regulator has refuted industry allegations that advisers would have to step in and help out, but Cerris Tavinor, spokesperson at the FSA, said a decision still had to be made regarding who would provide monetary information at the end of the two year pilot stage.
The regulatory body will finish running the pilot service and then look to work with partners with experience in dealing with consumers such as the Citizens Advice Bureau.
However, advisers remained sceptical over the nature of the service. Alan Lakey, principal of Highclere Financial Services, said something that is free is "perceived to have no value".
He added: "The Retail Distribution Review, which runs hand-in-hand with the MG proposals, risks confusing consumers because they will not understand about full advice, focused advice, guided sales, informed sales and money guidance. I am not sure that I, or even the FSA, understand what it is talking about," he added.
Peter Chadborn, principal of CBK Colchester, said: "The guidance will probably lead most people down the DIY approach under the potentially misguided opinion they have received advice or directly to their bank."
He added: "I want to know when guidance is actually thinly veiled advice. The mere provision of information alone will not encourage a huge percentage of people to take action and certainly not to visit an IFA. Making guidance specific to the consumers' circumstances is surely advice."
Another industry commentator, Roger Edwards, products director at Bright Grey, said the service could mean consumers sought protection from the internet or supermarket but added "for those who will not go for advice or pay for advice, it is better they have some protection rather than none".
Edwards said: "I doubt advisers would be happy giving out generic information when they are there to do a full fact find and individual analysis of customer needs. It is important to keep these things separate while at the same time hoping the generic information may lead more people to seek proper advice."
- To have your say on this issue, go to www.covermagazine.co.uk.
The news that the ABI and British Medical Association (BMA) agreement on GP report (GPR) fees has broken down will usher in a period of uncertainty.
Lack of innovation investment in the UK insurance market has been highlighted by recognition of RGA's work in the US.
Protection business in 2012 and 2013 will be affected by events this year and some fundamental changes to the way customers policies are priced into the next. Richard Verdin explains.
Employee assistance programmes are in the spotlight due to a schizophrenic approach by government. But as Sue Weir points out, they are backed by solid research.
How will people buy insurance in future? Greg Becker visits the US for developments in online distribution.