Targeted Support should be judged on ‘whether it’s “complimenting, not cannibalising”, the advice market, according to Steven Cameron, pensions director at Aegon.
He said the proposals mustn’t be judged by how widely they’re used.
Mr Cameron said: “While Targeted Support could help many non-advised customers with key financial decisions, it will never replace the personalised recommendations of holistic advice.
“This is why alongside Targeted Support, every effort should be made to protect all sectors of the current advice market and grow the advised population further.
“The consultation’s final question asks whether targeted support is likely ‘to be complimentary to holistic advice’ or a substitute – ‘cannibalising the advice market’. This is absolutely key. The true measure of success will be how many more individuals get the right support, at the right time, whatever form that may take.”
The regulator’s Targeted Support consultation closes today, but a number of significant details remain outstanding, according to Mr Cameron.
He said: “There are some remaining issues and barriers to successfully delivering Targeted Support. Under the Privacy and Electronic Communications Regulations (PECR), Targeted Support will likely be a financial promotion, meaning we need relaxations or exemptions to maximise its reach.
“The Financial Ombudsman Service (FOS) also needs to give the industry confidence that Targeted Support won’t be assessed against the same standards as full advice.”
He said the FCA could also offer firms more clarity on its expectations by setting out good and poor practice examples. Mr Cameron said they could cover areas such as how granular customer segments should be, different approaches to verifying customers fit in a particular segment, and when additional information offered by a customer may affect the process.
He added: “It’s disappointing that the FCA has currently ruled out using Targeted Support for pension consolidation. Most individuals approach retirement with multiple pots and Targeted Support could be very helpful here where advice isn’t sought.”
The FCA published its proposals on ‘targeted support’ in June. The changes would allow firms to make financial guidance suggestions to groups of consumers with 'common characteristics', the regulator said.
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