Trade body PIMFA has urged the Financial Conduct Authority (FCA) to ensure that the value of financial advice remains “obvious to consumers”, and that the boundary is not “further blurred”.

The trade association for wealth management, investment services and the financial advice industry called on the regulator to ensure that in progressing its targeted support reforms, the attractiveness of mass market financial advice is preserved.

In its response to the consultation paper, Advice Guidance Boundary Review – proposed targeted support regime for pensions, PIMFA argued that while it is right that targeted support should be able to provide what is currently tantamount to a personal recommendation, it cannot go so far as to confuse consumers about the type of service they are receiving, or diminish the attractiveness of financial advice.

PIMFA has called on the FCA to ensure that certain protections are embedded within the regime to ensure that targeted support is sufficiently distinguished from holistic advice.

Head of public affairs at PIMFA, Simon Harrington, said that targeted support can be “genuinely transformational”.

“There is a very obvious support gap which exists in the pensions space in particular which we think targeted support can fill assuming – and it is a big assumption – that consumers are willing to engage with it,” Harrington commented.

“But we remain somewhat frustrated with the focus of the FCA’s proposals, given that they appear to see the primary utility of targeted support as a method to help consumers buy different products rather than as a method to help them get better outcomes out of the ones they already own.

“By making targeted support transactional it risks blurring the boundary between advice and the new regime in an unhelpful manner.”

He added: “We believe that firms should have flexibility to design and deliver targeted support journeys which they think will benefit their customers most, but there need to be clear and unambiguous parameters in which these firms operate in as well as in how they communicate and disclose this service to consumers.”

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