The Association of Independent Financial Advisers has slammed the Financial Services Authority’s “McDonald-isation” of advice in the Retail Distribution Review.
The follows the regulators annoucement that unregulated generic advice could be introduced to help navigate consumers through the world of financial products.
The Association says the regulator wants to create an industry full of token, inexperienced advisers who give out financial advice like fast food.
Chris Cummings, director general of AIFA, says: “What we don’t want to see is the McDonald-isation of advice – the McAdviser.
“You can chose from a limited menu, the assistant will help up-sell you, if you’ve not enjoyed or benefited from the experience, you’ve no one to blame but yourself and, at the end of the day, you know you could have got better elsewhere.”
AIFA says that customers do not assess advice based on how much it costs.
Rather, it thinks the FSA needs to look to the reasons for seeking advice before it can label advisers as professional or independent.
Cummings says: “Looking at the primary advice proposal aimed at those consumers who do not currently seek advice and do not save and invest enough, if anything at all, I would challenge the FSA’s assumption that affordability is the reason why they currently choose not to seek advice.
“Many consumers would rather do something else with their money and this has little or nothing to do with the affordability of advice.”
AIFA thinks the FSA’s review ignored the issue of advice.
It says the consumer should be in control of who they choose for advice, and only after the term has been clearly defined by the FSA will they be able to do that fairly.
Cummings adds: “AIFA’s views have been clear – we want to see better labeling of what is, and what is not advice – do these proposals help consumers?
“We want consumers to be able to choose how they pay for advice – not regulators. Firms who see a commercial advantage will move to the remuneration structure that suits their clients.
“There is no right way to pay for advice. In the UK we benefit from a mixed economy of payment options: pure fees, fee-offsetting, commission, and factory gate pricing all already exist. The market, through consumer choice, will reward the most consumer-focused model.