Advisers should not bear the full responsibility for trying to close the advice gap, a senior industry professional has claimed.
Personal Finance Society president Sarah Lord has said although the advice gap was an ongoing issue, and many advice firms have been going the extra mile to help close the gap, it is not solely the responsibility of advisers.
She explained that there are aspects that tie in for advisers and they have a role as a profession to try and address the advice gap by giving educational seminars and guidance in that form.
Speaking at FTAdviser’s Later Life Summit (May 19), Lord said: “We are starting to see some businesses adapt their business models to span a greater spectrum of wealth and reach the lower income bracket who typically haven't been able to afford it, by using technology more and looking at efficiencies through technology as to how they can maybe drive by engagement."
However, she added: “The advice gap isn't just the responsibility of advisers. There is obviously a big interplay with regulation and the regulatory landscape that we're acting within and that distinction, particularly between advice and guidance.”
Lord explained that a lot of people are coming from a position of a fairly low knowledge base and as a profession, advisers can help increase that knowledge base but need to be comfortable in giving guidance under the regulations..
Ahead of the Queen’s Speech earlier this month, there were growing expectations of a financial services bill, given the Financial Conduct Authority’s proposed consumer duty rules coming in next year.
Industry members were calling for clearer boundaries around what is deemed as guidance and what is deemed as advice.
Lord said the PFS is liaising with the FCA on behalf of the advisory profession as to how it can navigate through trying to reduce the advice gap from a number of different angles.
MFP Wealth Management managing director Justin King was also on the panel and said his firm offers community events, puts out videos on YouTube and holds events locally to help people discuss care and the later life advice.
“The people who most need advice possibly are those that can't afford it and it's difficult for advisers to provide a service to the people who can't pay for the advice,” he said.
King said through the videos and community service, he hopes he is helping people to gain a better understanding through education.
“But for people to actually walk in through the door and actually sit down with me and for me to provide advice then it's going to cost and I can't do anything about that cost,” he sadded.
“It is significant because a lot of people can't afford it, so we've got to have organisations like Age Concern and government policy to help people understand how the care system works and what choices that they can make.”