The ABI’s savings manifesto launches today with another attempt to fill the gap between IFAs and Money Guidance and the rest of the population who will not get access to advice.
This is of course, only one brief line in the manifesto. All the rest of the stuff, pretty much makes sense, from restoring tax, simplifying the DC regime, encouraging employers to accelerate contributions and for a Government to consider fostering schemes that offer risk sharing. All fine. Good stuff. Couldn’t agree more.
However the Money Debate finds itself in two minds about point one. Here’s the first mind. Where is that gap? Measure it now. How far down the income scale are existing IFAs delivering advice. Where exactly is MoneyGuidance? Can we actually even measure the gap?
Still in mind one, is it widening? Well, yes it is, or it is certainly going to for the next couple of years as exam and model change requirements kick in, as the RDR goes ahead as planned. This leaves some advisers who currently serve lower down the market baffled, and wondering why they are being driven from serving this market.
Mind two. There is probably a need for people lower down the income scale, who do not want to see an IFA, to get streamlined advice. A great deal of distribution infrastructure has been lost. Streamlined advice could also possibly be offered by IFAs. Indeed, the Money Debate would like to see IFAs get an input.
However what it shouldn’t be is a sort of Trojan horse either for the worst aspects of DSFs or indeed for banks. This site was first to call for an FSA inquiry specifically into bank advice. It is vital their role is examined and in several cases their methods cleaned up, before the banks get any increased role in the future distribution even of simpler products.
Obviously the final question will be what sort of regulatory framework will attach to this, the ombudsman being the big issue.
But bringing the two minds together so to speak, the principle of providing more extensive distribution of products may well be a good thing, but some IFAs will be wondering why risks are being taken with the existing advice infrastructure while the ABI is hard at inventing something new.
