The regulator also set a £85,000 limit on simplified advice, which makes it harder to cover decumulation advice.
“In my view, once a customer has taken that first step to receive advice, they find it much easier to interact with their finances and make decisions in the future.
“So if there is a way to get more people from point A (never receiving advice) to point B (taking advice in any form) that is a significant step forward for our under-advised country.”
The SPP said while they support the principle of simplified advice, greater clarity was needed from the FCA on the scope/nature of products that may be advised under the proposal.
Smiley added: “More information is needed to ensure simplified advice offers consumers value for money.”
Jen Norris, director of reward and benefits at Isio, said the FCA should actively encourage effective, tailored financial coaching to be offered by both employers and providers.
She added: “Financial advice is complex, but the route to financial advice is also varied and potentially difficult to navigate. We propose advisory firms should be expected to provide both guidance and advice and be able to assess and justify the level of support needed, while managing the conflict of interest that exists within the advice versus guidance cost and profitability model.”
Advice/Guidance boundary
Mark Campbell, head of wealth proposition development at Isio, highlighted that the industry required clarity around the boundaries of advice and guidance as well as “a consistent, cost effective system of oversight across both that is reflective of the risk to individuals”.
“This will reduce the cost burden to advisory firms and ultimately individuals, create confidence in the industry and ensure it flourished by appropriately addressing the needs of those it serves.”
Campbell added the ultimate goal should be for each individual to be able to get the help they need at a “fair price”.
Smiley also felt further clarification of the boundary would be helpful to some including pension trustees and smaller firms.
However, she felt it was unlikely to provide any additional benefit for “larger, more established firms.”
Looking at the review as a whole, Smiley said: “In short, it is certainly a step in the right direction.”
alina.khan@ft.com
