George Osborne has ridden to Parliament on a white horse and produced an excellent Budget for strivers, savers and entrepreneurs, which is very good news for financial advisers.
Additionally, it looks as if Financial Advice Market Review is not going to deliver a silver bullet as far as access to financial advice is concerned.
Given the fanfare of its launch last August, and the government’s apparent willingness to take a radical approach to increasing access to advice for the mass affluent, the FAMR’s final report is something of a disappointment.
Instead of a silver bullet, FAMR specifically rejects a long-stop and sets out 27 other recommendations for incremental change.
These vary from suggesting that the FCA and the industry work together to shorten suitability letters, to the Treasury exploring options to allow consumers to pay for pre-retirement advice from their pension pot.
Many of the recommendations refer to the FCA or others, such as Her Majesty’s Treasury and Fos, exploring or consulting on an idea. So it is certain that over the next few years we are going to see thousands more words written about what could, should, or might change.
The inevitable and regrettable result of this approach is likely to be years of uncertainty for advisers and consumers and, of course, the greater the uncertainty, the greater the danger of consumer procrastination and long-term detriment.
The inevitable and regrettable result of this approach is likely to be years of uncertainty for advisers and consumers.However, as advisers it is important to note that FAMR makes it very clear that the current market delivers high quality solutions to those who can afford advice.
This conclusion is groundbreaking for all advisers, as it means the focus of the next few years will be on finding ways to deliver advice, or indeed guidance, to the less well-served consumer market.
In other words, today’s advisers are being encouraged to carry on serving their clients and, where possible, widen their reach by embracing new ideas so as to bring the benefits of good quality financial advice to the widest possible market.
This is where FAMR’s overall conclusions, with their focus on the affordability of advice and the ability of consumers to access it, come to the fore from the advisers’ perspective. Despite the absence of a silver bullet, I believe the detail of FAMR has the potential to create significant opportunities for advisers.
In the meantime, our concern should be the lack of definitive proposals or timescales from FAMR. If consumers are to have better access to advice, then the costs and risks of providing advice, in all its forms, needs to be reduced quickly.
Ken Davy is chairman of SimplyBiz Group
