The Personal Finance Society has renewed calls for the
Government to remove the term 'advice' from all branding, marketing
and communications associated with the formation of its new single
public financial guidance body.
In its submission to the Government's public financial guidance
consultation, lodged on Monday, the largest professional body for
the personal finance profession argues the persistent use of the
'advice' label, when referring to guidance activities, continues to
confuse consumers and the general public.
It suggests the creation of a new single guidance body offers
the perfect opportunity to clearly differentiate the services
offered by the new body from those offered by a regulated
professional adviser, by aligning terminology and using the term
'advice' only when specifically referring to regulated financial
advice provided by a professional financial adviser.
Personal Finance Society Chief Executive Keith Richards said:
"We have consistently called for terminology that is consistent
with the service being offered and more intuitive for consumers to
understand. Guidance which may signpost consumers to regulated
financial advice when required should not be called advice."
"Any promotion of services offered by the new guidance body must
be clear, accurate and not misleading, and we have to make it clear
that guidance is not advice in the regulated and qualified sense.
It is important not to mislead consumers into believing that they
will be receiving regulated financial advice, which carries full
consumer protection with it."
The Society argues that while some consumers might theoretically
see the term advice in a broader sense than the regulatory
definition, in practice the broader use of the term actually
creates confusion and misapprehension, especially when guidance is
the service being offered.
The Society's calls for clarity date back to 2014, when chief
executive Keith Richards wrote to both the Money Advice Service
(MAS) and The Pension Advisory Service (TPAS), recommending they
replace the word 'advice' in their names with 'guidance', to
portray their service more accurately from a public interest
As well as seeking further clarity of terminology, the Society
is also urging the new guidance body to:
o Instill trust and confidence in the financial advice market by
positioning guidance as a signpost, not a substitute, to the retail
financial services market;
o Bridge the gap between public guidance and regulated advice by
implementing a statutory objective to work more closely with the
financial advice sector, including facilitating follow-up actions
with the sector.