Last year the FCA and the Government set out three proposals for reforming the advice boundary, including clarifying the advice guidance boundary, a simplified advice option, and a targeted support regime. At Altus Consulting we strongly support the concept of targeted support.
Martyn Evans, CEO at Altus Consulting, says: “It has always been our view that the term ‘advice gap’ is incorrect, we believe what we are dealing with is more of an engagement gap and a product gap. To be effective, Financial Services products need to be combined with support services that help consumers understand how a product can help them achieve the outcomes they are looking for. “
The targeted support proposals mark the start of developing mass market investment support services that, to date, have been sorely missing from the UK Financial Services landscape.
Robert Holford, Head of Research & Regulation for Altus Consulting says: “We urge the FCA to focus its efforts on the development of the targeted support market, to see how much of the need it addresses, and to be ready to continue to innovate this approach in the future as this new product space develops.”
He added “The targeted support proposition as outlined in the proposals is unlikely to provide a complete solution, and we can therefore see the potential for this type of support to dovetail into a ‘simplified advice’ regime, but not the one outlined in the Discussion Paper. Indeed, we are not even sure calling targeted support services ‘advice’ is helpful in an industry context. The UK has defined Advice as a wealth product, both in terms of regulation and the industry approach to delivering it, which meets the needs of its target market effectively. Streamlined advice approaches already exist for those who need them, and advisers will already offer simplified advice services when a need arises.”
Our view is that targeted support addresses a different market segment compared to advice. As such it is the start of a process of aligning the UK with the level of support available to customers seeking to access retail investment products in other global markets.
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