When is information classed as ‘advice’?
The term ‘general advice’ should be renamed ‘general information’ according to Scientiam, in order to strengthen consumer protections and minimise confusion.
In the fintech firm’s submission to the Quality of Advice review, it called on the Government to make it easier for advisers to use technology. It would be more beneficial if consumers could use technology from advisers rather than from finfluencers.
Founder and managing director of financial advice firm Arch Capital, Nigel Baker, said: “When it comes to digital solutions, there are some concerns about the quality of information currently being issued but quality comes back to the source, which is why qualified and experienced advisers should be leaders in general information
“General information, educational content and financial planning tools prepared and approved by advisers are always going to be better and lower risk than services offered by product manufacturers and unqualified finfluencers.
“Advisers are also strongly positioned to determine if a person is better suited to a personal advice proposition or general information. An integrated approach would maximise the probability of clients receiving high quality information and advice throughout their life.”
He likened general advice and information to the difference between a doctor and a pharmacist and that advisers were the ones best placed to establish the advice needs of their clients.
“People linked to a super fund or product issuer can only provide information. To use a medical analogy, doctors provide independent advice. They may recommend medication and treatment, but they don’t sell it. Pharmacists sell product. The two propositions are very different and separate,” he said.
AUTHOR
Laura Dew
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