BBA expresses concern about clamp down on financial advice

The Financial Services Authority (FSA) this week announced measures to clamp down on where people can get financial advice. But the British Bankers’ Association (BBA) has warned that the move must not be to made to the detriment of consumers.

The BBA welcomed the publication of the FSA’s Retail Distribution Review (RDR), but said that they must take a more flexible approach in implementing its proposals.

The BBA has welcomed the FSA’s proposals for a step change in the level of professionalism for advisers and the intention to accelerate the introduction of a Professional Standards Board. It argues that advisers should be well trained and able to give top quality advice in order to deliver improved outcomes for consumers and help to rebuild confidence.

In addition, the BBA argues that widening customer access to advice is an essential. It has expressed concern that the FSA’s proposals risk undermining this by adopting a one size fits all approach.

The statement from the BBA argues that financial services should never be too complicated for people to understand. It therefore argues that while plans to develop simplified advice processes is welcome, the FSA’s proposal to adopt the same higher minimum exam requirements for these advisers is likely to discourage the development of such services.

BBA chief executive Angela Knight said:

“Banks have a key role in helping customers make financial plans that help them meet their saving and investment needs.

“We believe it is important that staff are properly qualified to deliver real benefits for customers and we support the FSA’s plans to increase minimum qualifications. We look forward to working with the FSA on how best to bring in new exams so this can be done in an orderly way, recognising that banks offer a whole range of different advisory services.

“We support efforts to make sure customers know what they are getting and what they are paying for. We also believe people should know if advice is tied in to any one institution. But change must be effective and proportionate and must avoid imposing excessive costs for marginal or no consumer benefit.”