Ashley Clark, the director of Need An Advisor.com has questioned the FSA’s motive behind closely monitoring care fees advice and termed it as “a diversion tactic”.
Clark blamed the FSA for not doing its home-work properly and said it appears to have made a knee-jerk reaction on care fees advice after the Dilnot Commission report was published this week.
“We will be active in supervising the development of new products, especially in light of previous problems with pre-funded long-term care insurance”, wrote Margaret Cole, managing director of FSA, to Dilnot’s Commission on Funding of Care and Support, before the report was even published.
There are less than a dozen care fees products available in the market including a couple of pre-funded plans, Clark claimed adding that a handful of enhanced equity release products are due to be launched soon.
“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 said.
Castigating the FSA for trying to hide its failure, Clark said the FSA’s suggestion of closely monitoring care fees products, when the core financial elements were already part of both financial planning examinations and long term care, was a ‘red herring’ diversion tactic by the regulator.
“It is banks selling 10 per cent 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”, he argued.
“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”, he observed.
“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”, lamented the Chartered Financial Planner.