Angela Knight, BBA chief executive, has written to FSA boss Hector Sants, urging him to commit to creating a “simplified advice” regime as part of the Retail Distribution Review, which is due to begin to be implemented by the end of next year.
The BBA originally proposed such a framework to the FSA last September, but claims to have received no response from the regulator.
Simplified advice, as envisaged by the BBA, would provide simple savings, investment and protection guidance for the mass market using automated models to recommend packaged financial services products.
Only last week, a report by Ernst & Young found the RDR would lead to the cost of advice soaring, meaning many high streets banks would no longer be able to provide it affordably to many customers.
This report has fed into widespread concerns that the RDR – part of the aim of which is to “allow more consumers to have their needs and wants addressed” – will create an environment in which only the wealthy will be able to afford financial advice.
Knight said: "We share the FSA’s aim of ensuring that consumer protections are in place and that high quality, cost-effective advice is available to people who need it. But we are concerned that advice will be written off as too time-consuming, expensive and complex by the very people who need it most, unless an alternative to full advice emerges.
"We feel that simplified advice will provide the safeguards that consumers need, while delivering effective advice at a reasonable cost."
