Levy changes mind on general advice

Speaking at the FPA Professionals Congress, the lead of the Quality of Advice Review (QAR) admitted to second-guessing some of her recommendations ahead of the delivery of the final report to the government by 16 December.

Eight months on, since first being appointed to lead the QAR, Ms Levy said what has surprised her most is just “how personal it is”.

“How passionate you all are and now, how passionate I am,” Ms Levy told FPA CEO, Sarah Abood.

While she did not have any “light bulb moments” over the past eight months, Ms Levy said she has changed her mind on a few things including her earlier proposed complete removal of general advice.

Back in August, Ms Levy recommended that “the regime should no longer regulate ‘general advice’ as a financial service, and the definition should be removed together with the obligation to give a general advice warning”.

Today, however, she believes it should remain.

“I was thinking it could move out of the regulated regime, I know people have raised significant concerns about that and so I am not going to proceed with the recommendation,” Ms Levy said.

“It will still exist. It will be a much smaller amount of conduct, it will be seminars and newsletters, that kind of thing will be in general advice,” Ms Levy said.

Her change of mind comes after concerns were raised that by removing general advice from the regulated regime, the likes of financial coaches and finfluencers would sit outside of the regulated arena.

“They, in fact, give financial product advice because it is hard to talk about money, budgeting, without talking about a financial product,” Ms Levy said.

“But it's most unsatisfactory because if you are doing money coaching, and that much of your job touches on financial products... to bring you into the regulatory net because of that [a small amount of financial product advice] is a little weird.”

Earlier this month, Herbert Smith Freehills argued that there is merit in continuing to regulate the provision of general advice to retail clients as a financial service.

The firm also expressed concern about social media influencers in the financial space (finfluencers), adding that “there is a need to regulate ‘finfluencers’ who endorse specific financial products”.