HM Treasury and the Financial conduct Authority today (3 August) launched a review to examine how to plug the advice gap.
The two organisations have spelt out that the review, which will gather evidence this summer, will examine the regulatory or other barriers firms may face in giving advice and how to overcome them.
This will include the interplay between the regulatory framework for advice and the role of the Financial Ombudsman Service and the Financial Services Compensation Scheme in redress.
Also under the spotlight will be so-called robo-advisers and the opportunities and challenges presented by new and emerging technologies to provide cost effective, efficient and user friendly advice.
Finally, it will also explore how to encourage a healthy demand side for financial advice, including addressing barriers which put consumers off seeking advice.
Launching the review, economic secretary to the Treasury Harriett Baldwin, said that making sure the financial services sector supports working people at every stage of their lives is a key part of the government’s long-term plan.
“That’s why we’ve launched a major new review to explore what more can be done to make sure consumers can access high quality and affordable advice so they can make informed decisions with their hard-earned money.”
After the review is completed, the Treasury and FCA have promised to outline a package of reforms which “will empower and equip all UK consumers to make effective decisions about their finances and facilitate the establishment of a broad based market for the provision of financial advice to all consumers”.
A regulatory environment which gives firms the clarity they need to compete and innovate to fill the advice gap is also promised alongside a “set of principles to govern the operation of financial advice.”
Proposals as to whether the regulatory perimeter for financial advice should be amended, taking into account European legislation, will also be made.
An examination of the role that might be played by regulatory carve-outs such as a so-called safe-harbour will also be included in the review’s consultation document, which is set to be published in the autumn.
Final proposals will be produced ahead of Budget 2016.