In an interview with FTAdviser, David Howell, chief executive of Guardian Wealth Management, issued a warning over widespread fears that the incoming Retail Distribution Review will reduce access to advice among mass market consumers.
Mr Howells said that it in 20-30 years’ time the government will have a problem as there will more widows and orphans as less people will receive financial advice “unless something is done now”.
Mr Howell believes that the mass market will not be serviced post-RDR as certified and chartered financial planners will be going for the top-end of the market that will be more willing to pay direct fees.
He said: “Banks don’t want to service the lower-end of the market as we have seen so how will clients get access to financial planning advice? That is where there will be an opportunity for firms that will be able to deliver cost effectively and deal in that market of the £100,000-£200,000 [pots] rather then the half a million upwards.”
Mr Howell believes that the government should play a part in delivering financial planning or advice and that there should be some form of tax break or incentive if they engage with a financial planner to get advice.
He said: “They should get some form of tax voucher back from the government for them to seek advice and that planner can then go to the government and get a discount on their fee.
“People need to be incentivised to save. We have Nest and auto-enrolment and compulsion eventually will arise, but I think there has got to be some form of online, low-touch, high-margin, self-enrolment online where people can do it themselves. That will be interesting to see what will unravel over the next three years.
“Something has to give because we are going to have an issue in 20-30 years time, if something isn’t done now as people won’t protect, won’t save as they think they can rely on the state and there will be no state provisions.”