Adviser opinion split on FCA’s proposed advice changes

Financial advisers are divided on whether the Financial Conduct Authority’s (FCA) proposed changes to pensions and investment advice rules will help them service new clients, a study from AJ Bell has shown.

The FCA’s consultation on making it easier for firms to give simplified forms of personalised financial advice, which closed on 22 May, aims to help more people get financial advice for important decisions, working alongside targeted support to enable consumers to access a range of advice services.

However, AJ Bell’s survey found that 39 per cent of advisers felt the proposals would have no material change to their ability to offer advice to client segments they do not currently support, while 18 per cent said they were unlikely to have any effect.

More than a third (35 per cent) believed the proposals would have a limited impact and 9 per cent said they would have a significant impact.

Just 13 per cent felt the changes would simplify the delivery of advice, while 41 per cent said they would make it marginally simpler, 37 per cent believed they would result in little or no change, and 9 per cent said they would add complexity.

When asked about their overall view of the proposals, 22 per cent said they were very welcome, 27 per cent felt they were mostly welcome, 35 per cent were neutral, 11 per cent were mostly concerned, and 6 per cent were very concerned.

“Good financial advice can make a real difference to people’s lives, yet only around 9 per cent of the population currently take regulated financial advice,” commented AJ Bell head of public policy, Rachel Vahey.

“So it’s encouraging to see the FCA looking at ways to make advice simpler and more accessible.

“Advisers and the industry broadly welcome these proposals. After all, any attempt to reduce unnecessary complexity, create more proportionate advice processes and give firms greater flexibility should be seen as positive.

“However, adviser feedback suggests there is still significant uncertainty about how much practical difference the changes will make once implemented.

“A survey of advisers using the AJ Bell platform indicates that while many firms support the direction of travel, there remains a lack of clarity around how the proposals would operate in practice and whether they would materially change the way advised businesses currently work.

“The proposals could help advisers working with current clients, but if the FCA were after wholesale change to the advice landscape, they may have to return to the drawing board.”

---