On 3 August 2015, the government announced a major new review looking at how financial advice could work better for consumers.
Most would agree that the Retail Distribution Review (RDR) has increased professional standards in financial advice. What it has singularly failed to do, to the surprise of very few, is to make advice more cost-effective and accessible - despite the fact that this was one of the FSA's original aims.
Following the introduction of pension freedoms this situation, commonly known as the advice gap, has become increasingly obvious with many savers being told they must take advice in order to access their funds - but then finding that there are no advisers who are willing, or indeed able, to provide the advice required.
The result is the Financial Advice Market Review, which has the aim of "ensuring that all consumers have access to the information, advice and guidance necessary to empower them to make effective decisions about their finances."1
The review will be co-led by the FCA and HM Treasury and is seeking to create a package of reforms which will:
In addition it will consider:
The consultation will be launched in 'autumn 2015' with a view to producing proposals ahead of Budget 2016.
As ever we would encourage advisers to have their say. If regulatory costs are increasing and/or the constraints on offering different types of advice are growing, then tell them so. In writing, in the media and, most importantly, in response to the consultation.
All together now...
Read the terms of reference of the Financial Advice Market Review.
Fiona joined the life and pensions industry in 1989. She is a Fellow of the Personal Finance Society, an Associate of the Chartered Insurance Institute and is currently Vice-President of The Insurance Society of Edinburgh. Fiona specialises in the areas of at retirement planning and pensions and divorce.