Matt Timmins, joint managing director of SimplyBiz Group, has predicted that the implications of the Financial Advice Market Review will be as far-reaching as those of the Retail Distribution Review.
In October, as part of the FAMR, the FCA and the Treasury launched an input paper giving advisers until 22 December to explain what put them off offering advice.
Mr Timmins said that he was fairly optimistic that the FAMR would seek to address the cost of regulation for advisers.
He pointed out that this was much-needed as advisers suffered a regulatory double whammy in 2015; in addition to a growth in requirements, there was also a growth in regulatory costs.
In fact, Mr Timmins said that some advisers saw their Financial Services Compensation Scheme levy increase by as much as 60 per cent, due to an industry-wide escalation in both the numbers of cases and the amount paid out – mainly on Sipp complaints.
On the plus side, Mr Timmins said that the industry would soon know some of the ramifications resulting from the FAMR, as the Treasury had promised to announce some of its findings in the 2016 Budget.
But Mr Timmins said that the downside was that the implications of FAMR for the adviser community looked set to be as far-reaching as those of the RDR. He said: “I cannot imagine that anyone does not agree that improving consumer access to financial advice is a positive outcome; I am just concerned about how much more disruption we can sustain.
“The SimplyBiz Group was also not convinced that the questions in the FAMR research were enough to create a whole picture of what the adviser market looked like in the post-RDR world, with regard to providing advice to the mass market.”
In November Mr Timmins ran a survey to explore the current views of advisers, the results of which were fed back to the Treasury. He said that from his own perspective the two biggest headlines were that, firstly, advisers were being forced to spend less time with lower income clients and, secondly, over three-quarters of them believed that this could only be solved by the introduction of a simplified advice regime.
Mr Timmins said another potentially high-impact consultation conducted during the fourth quarter of last year was the Pension Tax Relief Review, with the results again due in 2016’s Budget.
Although the consultation period for this review is now over, Mr Timmins said SimplyBiz did enter a response to the Treasury in September backing the government’s objective of offering clear, simple initiatives to savers to encourage them to accumulate enough money during their working lives to meet their aspirations for a sufficient standard of living in retirement.
Mr Timmins said that SimplyBiz also agreed that the current system of tax relief is expensive and wasteful of government revenue. However, he said the solutions outlined in the government’s proposal were wholly suitable.
