The Financial Services Authority is set to provide final guidance on simplified advice this week. Last September, the regulator published a guidance consultation outlining its definition of simplified advice, it recommended 3 possible ways.
The first was advice provided through a fully automated advice system where the customer would not at any stage in the process have the opportunity of discussion with an employee. The design, testing and review of the operation of such a system could prove more complex than the design of procedures to provide advice to customers face-to-face, or over the telephone. Given the purpose of the system is to provide advice on investments a fully qualified retail investment adviser would need to be involved in the design process from the beginning anyway to confirm that the system was fit for purpose before it entered into use.
The first to explore simplified advice were Aviva, it developed a prototype online model based on decision trees, but has now opted to focus on execution-only services. Paul Yates, strategy and product development director at technology provider Avelo, said simplified advice was already "dead". "There were too many checks and it wasn't really simplified enough. The key concerns around simplified advice seem to be that. "They're asking people to take too much risk." Independent Financial Advisors Enable of Bishop’s Stortford believe people are vital to getting simple clear financial advice.
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