A number of major wealth firms in the UK have raised concerns over the implementation of the Financial Conduct Authority’s targeted support regime, arguing that the line between guidance and advice is still unclear and that the delivery could lead to “more consumer confusion”.
The FCA is set to allow firms to offer a new type of help called ‘targeted support’ and make suggestions to groups of customers sharing common characteristics. Most providers have been positive about the changes, but some firms have warned that the current proposals could still make delivering this support difficult.
Responding to the FCA’s consultation on targeted support, which closes today, Hymans Robertson said that if individuals are receiving “contrasting suggestions from different providers”, it could lead to “more consumer confusion, greater levels of disengagement and more distrust”, which would “act as a significant barrier to adoption”.
“We also have concerns regarding the lack of centralisation on consumer segments. Trying to build segments that are not overly individualised, but not so broad as to be inappropriate, could be a challenge. The line between targeted support and simplified advice in this regard is not clear,” said Julie Hammerton, managing partner, Hymans Robertson Personal Wealth.
“A joined-up approach with the Financial Ombudsman Service (FOS) is critical, as otherwise the risk of redress could stifle innovation, even when the innovation seeks to give people better support than they can currently access,” she added.
Wealth management giant St James’s Place (SJP) said targeted support is “a welcome step towards helping more people with financial decisions”, but warned that the current rules on how firms handle additional volunteered information “risk making delivery impossible in person”.
“A simple playback mechanism, where customers confirm they share the common characteristics the support is built on, would solve this and allow delivery across both digital and face-to-face channels,” said James Heal, director of public policy at SJP.
“Simplified advice must also be part of the picture. Today it sits too close to full advice to work at scale. A more distinct, proportionate regime could bridge the gap between targeted support and personalised advice, while opening up new pathways for future advisers.”
