Aviva chief blasts Financial Advice Market Review

Aviva chief blasts Financial Advice Market Review

The chief executive of Aviva's UK life business has said the Financial Advice Marker Review is "not good enough".

Speaking at the Marketforce Future of Life and Pensions conference in London today (13 June) Andy Briggs said this was one of the key industry issues which needed addressing.

He said advice had become more important following the pension freedom reforms introduced in April 2015, which gave over 55s the right to access their whole pension pot in one go.

Mr Briggs said: "The need for advice and guidance was still there bit it wasn't as strong as it is now and they are having to make a decision about taking a lump sum, going into drawdown or buying an annuity.

"The vast majority of people are doing that without advice or guidance and the outcomes from that will be poor. I am convinced they will be poor.

"Frankly where Famr has got to so far is not good enough."

Famr was introduced by the Financial Conduct Authority in March 2016. At that time, then acting head of the regulator Tracey McDermott called on the industry not to view proposals in the report in isolation, but as a comprehensive package of measures designed to succeed where other FCA initiatives had failed.

A slew of 28 market changes were recommended in the joint FCA and Treasury report, aimed at closing the advice gap to achieve “a real improvement in the affordability and accessibility of advice and guidance to people at all stages of their lives”.

Advisers criticised the measures, with some branding them a “waste of time” and a “missed opportunity”. The FCA’s refusal to introduce a much demanded 15 year long-stop to complaints was blamed on it cowing to “the consumer lobby”.

Last month, the Association of Professional Financial Advisers - now the Personal Investment Management & Financial Advice Association - voice its criticism of the initiative, as the trade body's figures showed a fall in the number of advice firms.

The latest figures showed the number of advice firms had gone down from 14,491 to 14,054 between 2015 and 2016, though the number of individual advisers has gone up slightly from 23,864 to 24,761.

But profits in the advice sector have continued to shrink. In 2016 average profits before tax by firm was £145,716, down from £158,667 the year before. This was itself a decrease on 2014, when average profit before tax was £178,557.

At today's event in London, Mr Briggs added that businesses should look at using data to serve their clients better.

He pointed to companies such as Amazon or Netflix which use data to personalise their customers' experience.

He said: "While the technology gets quite exciting, the single most important factor is around data."

He added that pushing forward with the pensions dashboard and auto-enrolment, including bringing contribution rates up to 15 per cent, were both issues which needed addressing.