Not a day goes by in this industry that we’re not subjected to another ‘gap’: The savings gap, the protection gap, the knowledge gap, the trust gap, the transparency gap. We now have another one to add to the list. The expectation gap! It’s a wonder any of us gets any business done from minding all these gaps.
GC14/3 states there is an ‘expectation gap’ that has resulted in firms shying away from providing products or services that would be beneficial for customers for fear of falling foul of the rules. It also questions how firms can support customers in making informed decisions without stepping over the boundary into providing a personal recommendation.
Now, while I welcome this consultation (it really is a step in the right direction and will hopefully tackle the lack of clarity around what is and what is not advice), I’m not actually going to cover it in any more detail here, for two reasons:
1..It’s been covered in depth already, and in my opinion is more relevant to providers looking to exploit grey areas.
2. It’s another bit of ‘white noise’ that is likely to distract advisers from doing what it is they are good at: providing professional and valuable financial advice to customers who are willing to pay for that service.
What’s much more important to me, and hopefully to you too is the recent Guaranteed Guidance news. We now have much better clarity over the Guaranteed Guidance issue and who will be providing that service for the mass market. It’s still early days, and I suspect there’s much more to come out in the wash around the actual application of that service. But it looks like most of us agree it’s a good thing (aside from the debate around who will foot the bill – but that’s another topic for a different day). But in principle, GG gets an early tick from me.
I really think there will be some great opportunities (for those advisers who are ready) to benefit from the referrals that will surely follow, i.e. those people who might need Guidance+.
What I mean by Guidance+ is information and/or services that MAS, TPAS, Citizens Advice et al will not be able to handle. Guidance+ will, in my view, almost always lead to advice for people who had not initially thought about engaging in the first place. They’re far more likely to see the value in the services you offer, because an independent body, who they are more likely to trust, will have told them they need advice. And that’s got to be a good thing, hasn’t it?
When was the last time that a Government initiative has actually led to a definite positive financial planning opportunity of this potential scale? I can’t remember one.
Speaking as a provider, we need support from the FCA to avoid stepping over the advice line, but anything which encourages consumers to engage (even in a small way) with their investment and retirement planning is good news. The technology is there and we could see some innovative stuff coming to the market if it can be carefully untangled from regulatory uncertainty.
In a few years’ time think we’ll all look back on these early days of GG as being a catalyst for a revival in the professional financial advice sector.
Just don’t get distracted by all the gaps. They’re irrelevant, and if you’re not careful, you might end up falling into one and lose sight of opportunities to grow your business.