In a previous article I drew attention to the unique opportunity for you to have your say on the future shape of financial advice. Time is passing and action is needed now, so I urge you to write or e-mail.
The overriding objective of this government-inspired review is to “radically” improve the consumer’s access to financial advice. Radical is a strong word, and clearly indicates a willingness to consider fundamental changes to the current delivery, regulation and cost of accessing financial advice.
In considering the ‘advice gap’, the review wants to know how people who work hard and want to save for their future can more easily access the financial advice they need. Pre-RDR, advice was more freely available as many advisers subsidised the cost of serving less well-off clients. In the new fee-based world, this is neither possible nor practical, nor is going back to commission.
Do we need a new remuneration structure which gives the customer the choice of paying for advice through the product, or a fee?
The review also wants to know what regulatory and other barriers are faced in giving advice, and how they can be overcome. This potentially takes the review into every aspect of the advice process.
What are the rules that create artificial barriers between different advice processes? Which regulations simply add confusion and cost to the advice process for clients, while adding nothing to the value?
What are the rules that create artificial barriers between different advice processes?Another area of opportunity and challenge is, can new and emerging technologies bring cost-effective, efficient and user-friendly solutions to consumers? How can technology and the advice process work together in a way that does not alienate or confuse consumers?
The review will also look at the interaction between the regulatory framework and the role of Fos and the FSCS. Both offer essential consumer protection – however, their funding, particularly of the FSCS, is fundamentally flawed. What is your view on how the cost of consumer protection can be more fairly shared between the product manufacturers and advice firms?
The chairman of the FCA has been quoted as saying “we should not let the perfect become the enemy of the good”. I wholeheartedly agree, and if consumers are to have ready access to the advice they need, we must all make our views known to the Treasury now by emailing public.enquiries@hmtreasury.gsi.gov.uk.
Ken Davy is chairman of SimplyBiz
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