The Financial Advice and Market Review was commissioned in 2015 by the Financial Conduct Authority and the Treasury and was designed to improve access to financial advice. In some respects, the Review has ‘been and gone’, with the FCA having already published its assessment of its effectiveness.
However, in February 2020, trade association the Personal Investment Management & Financial Advice Association said it was “calling on the Industry, Government and Regulators to work together to bring about fundamental reform of, and wider consumer access to, professional financial and investment advice.” In doing so, its press release on the subject made no mention of FAMR.
PIMFA has published a policy paper entitled Future of Advice, in which its ‘buzzwords’ are ‘Industry Fit for the Future’ and ‘Professional Advice for All’.
The 12 key recommendations in the paper are:
- The definition of financial advice should be reviewed
- The regulatory perimeter – what the FCA does and doesn’t regulate – should be reviewed
- The approval of financial promotions should become a regulated activity
- Consumers should be better protected from online financial scams through the Online Safety Bill
- Effective implementation of the financial capability strategy
- Promotion of the value of advice and the financial advice sector
- Effective signposting to advisory services, e.g. via organisations that offer financial guidance
- The creation of new lower cost advice services
- A new regulatory framework to support a simplified advice service. Simplified advice should be limited to a range of designated safer products that are suitable for a wide range of consumers and there should be clear guidance on the key elements of suitability
- A review of the FCA Handbook to ensure a clearer, effective, proportionate and cost-efficient regulatory environment
- A review of and improvements to the FCA supervisory regime
- Promotion of high standards of behaviour and competence across the sector to increase professionalism
The Association also cites YouGov survey findings showing that 90% of consumers have never paid for professional financial advice, while 79% of those who had never taken advice had no intention of doing so in the future. 62% said that they did not need any assistance when it comes to managing their money.
Liz Field, chief executive of PIMFA, commented:
“There is now more than ever, an increased need for financial and investment advice and support, but most people still don’t engage with financial advice, seeing it as an expensive service for the well-off.
“PIMFA believes that access to advice should be an affordable option for everyone in the UK. Advice plays a pivotal role in a well-functioning financial services landscape, providing individuals with the support they need to navigate their financial journeys, as well as providing access to products and markets they would not be exposed to otherwise.
“PIMFA is committed to broadening consumer access and to creating the best environment for the financial advice and wealth management profession to deliver their services and meet their clients’ needs. We recognise that none of the recommendations we put forward today can be implemented overnight. But if we are to create an Industry Fit for the Future that ensures Professional Advice for All, it is vital the industry, regulators and government work together.”