But that is not going to be sufficient to close the advice gap, no matter how enhanced. Guidance will only ever be able to provide broad information to customers about what people in their position ‘might’ do.
What is required is something that sits in the middle of these two services. A service that tells a client what might be ‘good’ for them given their individual circumstances.
At present, were I to be asked if I had children and said yes, I would be advised to buy a life insurance policy, which to most of us would seem to be common sense.
But it would also constitute a personal recommendation and, as a result, the person providing that advice would incur the potential liability.
Pimfa believes there is scope to allow businesses to diverge from current suitability requirements to ensure they can recommend certain products or services based on gathering limited information from their clients.
This simplified advice structure would, in our view, empower businesses to identify potential clients with simple needs that could, in turn, be served through a simple service.
There are millions of UK consumers who could reasonably benefit from a service such as this.
The FCA identifies anyone with assets of more than £10,000 as someone who could reasonably benefit from financial advice. However, we all know a person needs far more in assets to benefit from advice.
But a simplified, stripped down, service that reduced the regulatory burden on businesses, and any likely liability, could be delivered at a much lower price point.
Through regulatory and legislative interventions, the UK financial services industry increasingly asks consumers to make complex financial decisions.
Our industry is in the business of providing the support those people need.
It is time for the government and the regulator to work with the industry to find a way to provide that support and to examine whether the binary conversation we’ve been having remains fit for purpose.
Liz Field is chief executive of adviser trade body Pimfa