Race is on to roll out simplified advice to the masses

‘With RDR becoming more prevalent you are going to have to get costs down, there will be a growing market,’ he said.

Regulatory guidelines

The FSA has not yet published guidelines on simplified advice services and is waiting to see what models providers and advisers come up with. The Association of British Insurers (ABI) has published proposals and Streatfield regards them as a good indicator of the shape of eventual regulation.

‘The ABI proposals are available, so we’ve got 80% of what it will look like. When you have the ABI putting its thoughts out then you’re not starting with a fresh wheel.’

Brigid Benson, principal of Manchester-based GÆIA Partnership, said the success of simplified advice would depend on the regulator’s stance.

She argued that, while the provision of mass market advice was crucial, she was concerned about how advisers serving the sector would be remunerated.

‘I would be pleased if it served the mass market but my concern would be who the firms are doing it for and how are the advisers remunerated and incentivised,’ she said.

‘If it just becomes banking firms with direct sales forces then it would be another regulatory failure.’