In addition, the FCA has committed to a holistic review of the advice/guidance boundary. With the UK no longer bound by EU regulations, there’s the opportunity to move away from the Mifid definition of advice.
I have been contributing to work led by The Investment and Savings Alliance, which has been designing a proposed "more personalised guidance" regime.
This would be offered only by FCA-regulated firms but unlike current guidance would be allowed to take into account some personal attributes of the individual, without that automatically being deemed advice.
This could complement advice, offering more limited but very valuable support to lower wealth individuals in areas such as stocks and shares Isas, adequacy of workplace pension contributions and considering investment fund choices.
Encouragingly, an amendment to the financial services and markets bill recently proposed by MP Harriett Baldwin to introduce a personalised guidance regime gained cross-party political support.
While this won’t appear in the act, MP Andrew Griffith, economic secretary to the Treasury, indicated this would be explored alongside the review of the advice/guidance boundary.
The RDR was quite revolutionary for its time, and fortunately the advice industry has gone from strength to strength. But 10 years on it’s time for another rethink. It’s imperative that current successful advisory models continue to thrive.
But alongside these, for those firms who want to offer new services to currently unreachable client groups, a more personalised form of guidance could further empower firms to deliver the good outcomes the new consumer duty is aiming for.
Steven Cameron is pensions director at Aegon
