The Financial Advice Market Review must address the many different consumer needs for advice, according to a Conservative MP and member of the work and pensions select committee.
Speaking today (3 November) at the Association of British Insurers’ biennial conference, John Glen said that it’s all about the integration of needs across an individual’s lifetime, something which economic secretary to the Treasury Harriet Baldwin said she is hoping that the market will develop more options for.
“By talking about the prospect of pensions and savings you can make a better impact, there is a sort of integrated interface with the industry and the various components that go with it that will allow people to facilitate wise choices earlier.”
Mr Glen noted that there will be have to be a distinction between those that pay £200 for a “quick” recommendation of “the right direction” for cash and those that can pay £500 or more to get more comprehensive advice.
“The review must recognise those different scenarios, because the industry is not well placed to cater for all of those different client groups in the same way.”
Last month the Financial Conduct Authority and HM Treasury launched an input paper for the Financial Advice Market Review, giving advisers until 22 December to suggest solutions to the ‘advice gap’.
The paper stated in recent years the FCA had seen a decline in the number of financial advisers offering professional advice - from around 26,000 in 2011 to 24,000 in 2014.
A number of major providers have cut back their professional advisory businesses, or left the market, the regulator stated, while the remaining advisers have increasingly focussed on high net worth individuals.
Speaking at the same session at the ABI conference, Yvonne Braun, director for long term savings policy at the industry body, said the pension label can be confusing to consumers, “because people conflate the state pension with problems with Equitable Life”.
This is why the ABI has started talking much more about long term savings. “Terms like annuity, UFPLS [uncrystallised funds pension lump sum], drawdown... we need to get that out.”
ruth.gillbe@ft.com
