The Financial Conduct Authority (FCA) has given advisers new signs of hope some of the sector's longest-standing concerns could finally be addressed.
In a paper published on 9 March, the regulator again acknowledged adviser concerns around the lack of a long-stop, the inconsistency of Ombudsman decisions and the 'confusing' definitions of advice, pledging it will address these as part of its current review of the advice market.
The FCA had been consulting the industry on perceived barriers to innovation and was told by "many" adviser representatives the lack of clarity over regulatory definitions of advice, guidance and personal recommendations were a barrier to the use of digital and mobile solutions.
Some went further and suggested the treatment of liability, specifically how the Financial Ombudsman Service (FOS) makes decisions on consumer redress, coupled with the absence of a liability long-stop for advisers, is another barrier to innovation, the regulator said. It added that respondents believed these factors could act as a disincentive in the development of digital and mobile solutions.
The regulator acknowledged it was now "more important than ever" to have a functioning advice market for consumers and said it would explore the issues as part of the Financial Advice Market Review (FAMR).
The regulator had already said in October it would consult on the options for a time bar on complaints against financial advice as part of FAMR. It has now said it would present proposals to the government in Spring 2016.
FAMR is a joint initiative between the FCA and the Treasury that was initially set up to find ways to make advice more accessible for the mass market. It is believed some proposals will be revealed by the Chancellor in next week's Budget.
Little action
Advisers have long argued the absence of a long-stop was affecting their business and have been lobbying the regulator for alternative solutions.
In its 2014-2015 Business Plan, the regulator announced it would consider the case for re-introducing a 15-year time limit on complaints to the FOS "to review whether the current arrangements are delivering the best outcomes for consumers overall". So far though, no further plans have materialised.
Advisers have also long been vocal about inconsistencies in the way the FOS and FCA rule about bad advice although a shout-out to advisers by Professional Adviser for evidence of inconsistencies last July produced little response. It followed a similar initiative by FCA technical specialist Rory Percival, which, he said, also did not receive any response.
The FCA said in its new paper: "We recognise that there are a number of aspects within the financial advice market that are perceived as barriers to innovation. These perceived barriers are relevant to both digital and mobile solutions as well as wider development in the sector itself.
"Following the Government's pension reforms it is more important than ever to ensure that the provision of advice functions in a way that benefits consumers. Given the significance of this work and its relevance to the issues raised by respondents to our Call for Input, we will explore these issues through the FAMR."
