New proposals announced today by the Financial Services Authority (FSA) for providing financial advice could prove costly for customers, according to the British Bankers’ Association (BBA).
The BBA is concerned that any proposals to curtail or ban tied advice, where a bank advises only on the range of products it provides, would force customers to choose between paying a fee for advice and using a non-advised service. This could have a significant impact on customers’ access to mass-market, cost-effective, key financial products. This would impact most on those who may lack adequate savings or investments, and would conflict with various FSA and Government initiatives to encourage people to save for their future.
The association said that it will be following up its concerns with the FSA and will in particular want to explore whether the FSA’s concerns on consumers’ perception of sales and advice can be addressed through improved disclosure.
Angela Knight, chief executive of the BBA said:
“Many customers have a good idea of what they need and want to get advice and buy their financial products from a brand they know and trust. The FSA proposals could remove this option, leaving individuals with the choice of either more expensive options or buying without advice.
“Of course we are in favour of improved clarity for consumers, but this shouldn’t come at the expense of consumer access to trusted and cost effective advice.
“The FSA should think very carefully before introducing changes that may restrict customer access to advice, which is contrary to one of the key objectives of the review.”
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