I think most readers of Financial Adviser would be in agreement with the core objective of the Financial Advice Market Review, which is to improve access to quality financial advice for consumers, particularly those currently less well-off.
Equally the majority of readers are, directly or indirectly, involved in the provision of professional financial advice. This means we know at first hand the many benefits it can bring to individuals, families and businesses.
The other side of the coin is that consumers need to understand why having access to advice, and using it, is so important. The FCA’s approach so often implies that it believes potential clients are lining up around the block outside advisers’ offices, clamouring for the opportunity to receive professional advice.
Unless one is referring to some of the idiots who are currently trying to cash their final salary pensions, this is simply not the real world. We hear a lot these days about the importance of ‘nudge economics’. However, in the case of saving for the future and protecting their families I believe it is time most consumers were given a ‘big shove’.
In the real world, the emphasis all too often is on instant gratification, with consumers being told they can have it all, and, if they borrow enough, they can have it all now. In such a world, where consumer demand is for instant gratification, rather than long-term security, the constant message of the importance of saving for one’s future and one’s family need to be promoted strongly.
Long before a consumer thinks about meeting with an adviser, the benefits of doing so need to be spelled out in simple and powerful terms. Protecting one’s family and saving for the future demand that the consumer forgoes consumption today for greater benefits in the future. If the FAMR succeeds in making good-quality financial advice more readily available to consumers, it will also need to drive up real demand by highlighting the value and importance of that advice. There is a huge difference between the provision of information and guidance and the promotion of personalised advice.
As a profession which delivers high-quality professional financial advice, promotion of its importance could be misconstrued as self-serving. The reality is, however, that in order to help consumers understand the important benefits of financial advice, the regulator and government need to start shouting very loudly about them.
To help consumers understand the benefits of financial advice, the regulator needs to start shouting about themThe public needs a ‘big shove’. With a joined-up message and better access to advice, the FAMR has the opportunity to make a huge change, which would be positive for not only advisers and consumers but also for the future financial wellbeing of our country as a whole. Surely this is worth more than just a nudge.
Ken Davy is chairman The SimplyBiz Group
