In its latest annual product sales report, the FSA shows that the proportion of retail products sold with advice declined by 2% between 2009/10 and 2010/11, to 66%. The fact that the aggregate of products sold has declined over this period is perhaps not surprising given the state of the markets, economies and sovereign debts etc, but the surprise is that of all the sales made, less have been made with advice.
At the same time, the FSA is still to outline the details of its Simplified Advice guidance with chief executive Hector Sants being over-ruled by his own organisation over when this announcement will be made. In front of the Treasury Select Committee in March, he said the review would be published “by the summer” if not before, yet a spokesperson for the regulator confirmed in written evidence it would present it by the end of the year. The latter is still its intention.
Meanwhile, the Retail Distribution Review is still to confirm the full detail of how execution only business will be conducted through platforms, with new rules governing the sales of funds through platforms being delayed.
FundsNetwork, Cofunds, Skandia and other platform providers are best placed to offer access to quality investment products that don’t have the legacy of poor performance and mis-selling that high street banks and life companies do.
As the FSA has shown, advised-sales is already decreasing and with the predicted drop-off in the availability of advisers post-RDR, this is only likely to increase – RDR will provide better qualified investment advisers but their audience is still limited to those who can afford their services.
