The FCA has faced criticism in recent years that its Retail Distribution Review programme, meant to improve consumer confidence, has effectively priced out people with smaller net worth from accessing professional financial advice.
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The Treasury and the Financial Conduct Authority has today launched an investigation on how to improve consumers’ access to financial advice.
When consumers take advice it is a step towards addressing a financial need.
There will also be a separate consultation on the role of publicly-funded guidance, including Pension Wise and the Money Advice Service.
It will also be asking if there is an advice gap – which there certainly appears to be – how can it be closed?
The suggestion is that automated robo-advice could allow people to make decisions without having to pay more for a dedicated financial adviser.
“Helping hard-working people achieve their aspirations at every stage of their lives is at the heart of our long term plan”.
Where the market for financial advice is working well we expect to see consumers able to obtain the form of advice that best meets their needs, with firms offering them competitive prices, good quality, choice and innovation.
The Financial Advice Market Review was launched in August to look at how financial advice could work better, especially for less well off consumers.
“That’s why we’re exploring what more can be done to make sure consumers can access high quality and affordable advice so they can make informed decisions with their hard earned money”.
McDermott added: “The financial decisions people make can have long reaching effects”.
The consultation is due to close on 22 December, and a review is expected to be published before next spring’s Budget. Ninety per cent of those who have taken advice report that they were pleased or satisfied with the service, but overcoming the cost barrier and extending advice to a wider group will require careful consideration of issues such as the potential use of digital and industry business models.
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The review will be supported by an external expert advisory panel comprising of industry and consumer voices, and chaired by Nick Prettejohn.
