Policymakers’ strategy for closing the ‘advice gap’ differs strikingly from that of product and service providers and public policy on how to address consumer access to advice is “not settled”, the Financial Services Consumer Panel has found.
Research by the FSCP suggests advisers and product providers are most concerned with the cost of engagement, which they believe is increasing the number of customers who are not economically worth serving.
However, policymakers and consumer bodies are instead focused on motivating and equipping consumers to use the advice services already available on the market.
The panel’s report said: “It would appear that public policy around how to address the savings gap, and therefore any potential advice gap, is far from settled.
“There is a need to establish what would be good outcomes, and quantify the extent to which the current and future position falls short of this. This would address calls for more evidence-based research, in particular with consumers, to inform the debate.”
The report concludes that although the Treasury aims to give more room to move to the Financial Services Authority, the FSA’s objectives mean that many of these problems “are not theirs to solve”, even though the market is defined by the regulatory framework.
The research also highlighted the ‘advice gap’ which covers much of the middle ground between simple and complex advice, and lower and higher income customers.
