HM Treasury has acknowledged the government needs to do more to improve access to advice across Britain.
In a letter dated August 2, the economic secretary to the Treasury, Andrew Griffith, responded to an adviser's letter to his MP and pledged that the Treasury would work closely with regulators to help more Britons access financial advice.
Tim Morris, an IFA for Russell & Co, had written to his constituency MP Matthew Pennycook, Labour MP for Greenwich and Woolwich, using a template letter created as part of FTAdviser's Promote Your Profession campaign.
Mr Morris raises concerns about the impact of regulation on the market for the provision of financial advice.Andrew GriffithThe letter raised points of concern over disproportionate regulation on small advisory firms, concerns over the regulatory fees and levies, the impact of financial services regulation on the market for the overall provision of financial advice and the importance of better financial literacy among Britons.
Pennycook had said he was "happy" to raise the issues outlined by the adviser, and approached the Treasury to ask what the government was doing about the burden of regulation and the lack of access to financial advice in the UK.
Within a few days, Griffith wrote back to acknowledge the "concerns about the cost and regulatory burden placed on financial advisers".
In his letter, seen by FTAdviser, Griffith said: "Mr Morris raises concerns about the impact of regulation on the market for the provision of financial advice.
"Encouraging the provision of financial advice to a wider cohort of consumers - and therefore reducing the advice gap - is a longstanding government objective, which I believe has the potential to improve the long-term financial wellbeing of many households across the UK."
He went on to mention the work the government is doing with the FCA on a review of the regulatory boundary between advice and guidance.
His comments coincided with the regulator's announcement yesterday (August 3) that it will not press forward with simplified advice. Instead, it will roll that up within the ongoing review of the advice/guidance boundary, as announced earlier this year as part of the Edinburgh Reforms.
The government agrees that financial education is essential to ensuring that people are prepared to manage money well.GriffithWhile he did not promise to help unravel the burden of regulation on advisers, Griffiths wrote: "It is important that regulatory burdens imposed on firms are proportionate.
"Legislation ensures the Financial Conduct Authority must have regard to the principle that a burden or restriction imposed on a person, or on the carrying out of an activity, should be proportionate to the benefits expected to result from the imposition."
Griffith also acknowledged the importance of the link between financial literacy and financial wellbeing.
Responding to Morris' original letter, the Treasury secretary wrote: "The government agrees that financial education is essential to ensuring that people are prepared to manage money well, and make sound financial decisions."
He referred to guidance created by the Money and Pensions Service in 2021, which aims to help decision makers enhance financial education in school and educational settings within the UK.
Morris said: "I’m very much looking forward to an update on the action points and a timescale for the stated actions being implemented."
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FTAdviser's Promote Your Profession campaign in the first half of this year has formed the building blocks for our Better Business initiative in the second half of this year.
Regular readers will remember the Better Business section of Financial Adviser, which has taken on a new shape to help adviser business owners develop, promote and shape their businesses for the future. Look out for our updates in the coming weeks.
