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07 July 2011

Need An Adviser.com Director, Ashley Clark, has questioned the FSA?s motives on monitoring care fees advice more closely in what he considers a diversion tactic. ?The FSA has clearly not done its homework and appears to have made knee jerk comments on care fees advice after the Dilnot Report in suggesting that it will monitor care fees product advice more closely?, said Clark. He claims there are less than a dozen retail care fees products available today including just a couple of pre-funded plans with possibly some enhanced equity release schemes on their way. He continues: ?The main focus of social care advice is not product related but to help worried families pre-retirement as well as in latter life stages by having an understanding of the benefits system, maximising secure income, planning for care fees inflation and explaining the risks on asset protection and asset deprivation?. Clark suggests these core financial elements are already part of both the Long Term Care and core financial planning examinations and the FSA suggesting it may closely monitor care fees product advice now is a 'red herring' diversion tactic to mask its failure. ?It is Banks selling 10% commission investment bonds like the one I saw last week or advisers moving clients into ?high charged, commission loaded? pensions or other high risk investments that impact dramatically on future capital and income availability for client care?, claims Clark. Clark believes that the FSA is continuing to ignore, despite ever-rising complaint levels, the standards of high impact, bank assurance advice yet appears to be targeting niche advice areas such as care fees that are the domain of the IFA where complaint levels are low. He said: ?The FSA should spend supervision resources on high impact firms for pre-retirement and savings advice sectors and not niche advisory sectors. The damage is already done by the care planning stage if constant miss-selling scandals from high impact firms continue. Public trust of the financial services sector has not improved under the FSA?s tenure and I suggest the FSA is either deliberately avoiding the issue of banking advice standards or is genuinely clueless and is using care advice post ?Dilnot? as yet another headline grabbing displacement activity?. Clark believes the FSA should concentrate even more on firms that risk the greatest consumer dentriment rather than playing to headline niche areas where only qualified, specialist advisers will be involved anyway. ENDS

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