The association believes that a core component of tackling the savings crisis would be to create an industry-wide kitemarked guidance framework, which provides support in making short, medium and long-term financial decisions.
The aim is to provide financial guidance throughout an individual’s life, as well as around critical financial landmarks, such as buying a property or saving for retirement.
This would involve boosting education to enhance financial capability, giving better access to information and pointing people towards full, tailored advice where appropriate.
In November, Tisa found more than a third of the 2,606 people it surveyed wanted better access to everyday financial guidance.
David Dalton-Brown, director general of Tisa, stated that the UK faces a tipping point in 2035 when future generations will retire worse off than their parents.
He said: “To avert this looming crisis, individuals need to take control of their financial affairs by pro-actively managing their money and planning for the future.
“Financial guidance will be the primary support for millions of people and will therefore be of critical importance if we are to help ensure society is financially capable, savvy and attuned to the both the importance of saving and to the opportunities it presents.”
He continued the industry standard would ensure everyone has access to trusted guidance and best practice, raising the levels of financial capability and standardising all guidance being offered, from financial services firms to the third sector.
“We hope that our views are strongly welcomed by HM Treasury and the FCA and look forward to working with the financial services industry to provide support for consumers to seek better guidance and advice.”
Graeme Mitchell, managing director at Galashiels-based Lowland Financial, told FTAdviser that guidance versus advice is a thorny issue, because guidance still leaves people with decisions to make for themselves.
He said only advice should ensure a better outcome if all factors are taken into account.
Mr Mitchell said: “A kitemark is something I have always advocated, but I seem to recall the FCA are not willing to give their seal of approval, so who can be trusted to decide what is kitemarked and what is not?
“Also you have to be very careful to avoid a rush to the bottom and decisions based purely on cost, as the lower it gets, the less scope for advice and you’re in a vicious circle where even people with a kitemark will avoid making a decision without someone to sense check.”
Alan J Solomons, director at London-based Alpha Investments and Financial Planning, agreed the kitemark was a “wonderful idea”, but the target audience are unlikely to engage with it.
“What is needed is some form of TV programme to educate people that will appeal to the target audience; the real issue is that personal finance is not taught in schools.”
peter.walker@ft.com
