Fnarr, right? Some weeks you’re just at home to Finbarr Saunders and there’s nothing you can do about it. But the alternative was to try and find a joke with no more than seven words that included the word ‘perimeter’ and I think we all know where that might have ended up.
My mind has gone to places it shouldn’t – but all too regularly does – thanks to the regulatory pronouncement on the advice / guidance boundary review. For those of you who missed it, broadly speaking the game’s a bogey as it currently stands and as NMA reports here, it’s back to the drawing board. Therese Chambers, director of consumer investments at the FCA, said at the TISA conference yesterday that the review would start with a blank canvas and would encompass accumulation, GYMBOA*, GIAs, pensions (though not DB transfers) and loads of other stuff.
It’s all going to take quite a long time I think; Therese was certainly managing expectations about timescales and delivery, much as the now 14-year old lang kitten v1.0 does when it comes to delousing her room. Therese didn’t quite say “but Dad, it’s so bad now that it’ll have to get much worse before it gets better and you’ll have to be able to deal with that” but she wasn’t far off.
So this is going to take us back round what’s advice and what’s guidance and whether ‘advice’ should be a protected term, a bit like Falukorv, the celebrated Swedish sausage. The idea being, of course, that ‘advice’ should be reserved for PROPER advice, which is the sort that you can sue someone for if it doesn’t work out. That’s different to robo-advice, which has no robots and no advice, as I’ve written many times before, but isn’t as different as you’d think to limited advice which isn’t limited in liability but is in other areas and isn’t different at all to restricted advice which is sort of like limited advice except not and isn’t different at all to independent advice which isn’t necessarily independent at all. I’m glad we’ve got that sorted out.
Consumers will obviously find this all tremendously tedious, as they’ve demonstrated in the past, and in a lulzworthy moment last week someone told me they’d seen a survey in which consumers thought guidance actually was a higher standard than advice, because in the former someone actually guides you through something together whereas in the latter they just opine on it.
Generally speaking trying to get consumers to go somewhere they don’t want to go is the equivalent of shouting “SAUSAGE EGG AND CHIPS” repeatedly in small Etruscan fishing villages, although if you shout “FALUKORV” in Skellefteå you might do alright. I’m not sure that hanging onto naming conventions that demonstrably haven’t worked in the past is going to do so in the future.
What has this all to do with friction? Well, m’colleague Alison Gay, recently ex-FCA, was chuckling about the FCA’s interest in “sludge practices” which broadly means that it doesn’t like contracts and processes that make it hard for consumers to do the right thing. So, for example, I signed up for a well-known open finance app a wee while back, which was a lovely experience, all quick and online and that. I didn’t like it, so went to cancel and have my data forgotten. Guess what I had to do? Phone up or write in, that’s what. On actual paper. I peered over my glasses at the app but even that didn’t work, and that’s sludge right there.
Another way to talk about sludge is ‘friction’ – you put extra steps or slow processes in where you don’t want people to rush through, for good or ill. Friction can be good – it can help stop scams, for example. But it can also be Not Good, and that’s where either it needs removed or at least some lubricant needs applied. I’m sorry, I just couldn’t help that one.
It strikes me that the taxonomy of regulated financial advice as it stands introduces significant friction to the act of consumers getting someone professional to help them with their finances. We’ll publish some research soon which demonstrates the impact of this – and it’s not nice reading.
If the review is going to achieve anything, I think it needs to concentrate on removing the confusification that stands between consumers and the good that advisers – as we know you now – do. If that means letting go of labels we’ve got used to in the past, then that seems to me to be worth doing. Friction where you need it, not where you don’t.
*Getting Your Money Back Out Again. Decumulation is not a word, never was and never shall be.
- It’s provider rating time! We’re doing it less frequently now but covering a much bigger range of providers. If you have an opinion – good or bad – on service you and your clients have received, this is the perfect place to rate it. The benefits to you? It feels goooood. You’ll get a playback of the results so you can see how harsh you were compared to your peers. You’ll get an invite to an exclusive Consumer Duty seminar we’re running, and also entry into a boffo prize draw. These are all Fine Things, so please do participate. Did you know some stellar industry ratings are handed out to providers who only have 8 firms rating them? We can do a bit better than that. Please take the survey here.
- I used to be taught that IHT was a voluntary tax…maybe not so much. But then we can all put extra into pensions now, can’t we…
- If you haven’t looked for a bit, may I recommend a trip to langcatanalyser.com? It’s got a lovely new look and everything, as well as a tonne of new DFMs and more. That was an #advert.
- And your music choice – well, we talked about sludge and so sludge is what you’re getting. Specifically Slugdge. Which interestingly isn’t all that sludgy. Never mind! Here’s Putrid Fairytale by said Slugdge because you’ve all had it far too soft for far too long. Fnarr, etc.
See you next week