The Money Debate believes that Peter Williams’ idea for basic advice plus is an idea whose time has come too late and, er, too early.
It is too late, because it seems almost impossible to envisage the FSA/FCA cooperating in a system that lends its name to approving different products - even price capped and simple ones - when the sales will be incentivised through the commission system which it reviles.
Too early, because even with Lloyds/HBoS joining the retreat from the middle market, I don’t think that is viewed as a crisis yet. I suspect the FCA believes the casualty rate remains acceptable. Only when it becomes politically unacceptable, will it be prompted to act.
It also sets up a very interesting divide between accumulation and a little bit of annuitisation for the less well off and deaccumulation for the better off.
That would need to be backed by unbiased and very broad-based consumer research.
It would also be good to see at least a rough financial calculation of what the business model looks like, both one attached to a bigger firm and one operating on its own.
Finally, does the exam regime for this sort of adviser simply equate to level three or does it require adaptation? If a full range of protection products were to be allowed, then perhaps it needs a bespoke protection module.
This sort of reform may well be necessary but until we start asking the really broad questions, rather than answering narrow regulatory ones, I just don’t think it will happen. But perhaps Peter will prove us wrong.
