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 each individual’s life, as well as around critical financial landmarks, such as buying a property or saving for retirement.
Tisa director-general David Dalton-Brown (the author of a piece on page 24 of this issue of FA) said: “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 both the importance of saving and to the opportunities it presents.”
He added that 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 the Treasury and the FCA,” continued Mr Dalton-Brown, “and look forward to working with the financial services industry to provide support for consumers to seek better guidance and advice.”
Citizens Advice, which operates the face-to-face Money Advice Service, declined to comment on Tisa’s call for a guidance framework.
Graeme Mitchell, managing director at Selkirkshire-based Lowland Financial, said that guidance versus advice is a thorny issue, because guidance still leaves people with decisions to make for themselves. He said that 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 there is for advice, and you are in a vicious circle where even people with a kitemark will avoid making a decision without someone to sense check.”
While agreeing that the kitemark was a “wonderful idea”, Alan J Solomons, director at London-based Alpha Investments and Financial Planning, believed that the target audience was unlikely to engage with it. He said: “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.”
Industry view
Mas chief executive Caroline Rookes said: “It is important to bring consistency to the advice and guidance provided to consumers to ensure that they understand how and where to get the information they need when it comes to their money.
“There is no doubt that the UK faces a crisis when it comes to money management and financial literacy. The Financial Capability Survey found that around four in ten adults are not in control of their money and one in five cannot confidently read a bank statement. Tackling this requires a fully collaborative approach. The government, product providers, intermediaries, charities and educational bodies need to work together to raise levels of financial understanding and reverse the UK’s ‘spend for today’ attitude.”
peter.walker@ft.com
