The Association of British Insurers (ABI) has responded to the Financial Services Authority’s (FSA’s) Consultation Paper on the Retail Distribution Review (RDR) by applauding the work so far but expressing disappointment that it does little to encourage savings and advice for the mass market.
ABI director of life and savings, Maggie Craig, points out that around half the UK population is not currently saving enough and that the review provides an opportunity to help individuals access financial advice that suits their needs.
However, the FSA wants the same level of qualification for those who offer streamlined advice as for those who issue full advice. According to the ABI, this raises “serious concerns” that fully qualified advisers will look towards higher paid work, to the detriment of those who want access to simple products.
The Association is also calling for “clear labelling” to help consumers receiving financial advice for the first time, rather than the range of options proposed by the FSA, such as independent advice, restricted advice, basic advice and streamlined advice sales.
The body also suggests that the regulator and the Financial Ombudsman Service will need to give clear guidance on how they will treat different categories of advice.