UK Government to Launch Review on Access to Financial Advice
The Financial Conduct Authority (FCA) and HM Treasury have jointly launched a review on customer access to essential financial advice. Called the Financial Advice Market Review (FAMR), it has been launched with the aim of giving all customers equal access to the financial advice they require.
The FAMR comes on the heels of the pension reforms of April, which gave those contributing to retirement plans full access to their pension funds without having to purchase any annuity.
According to the HM Treasury, the review aims to examine “advice gaps” for consumers who “work hard, do the right thing and get on in life but do not have significant wealth;” ensure that legislative and regulatory environments encourage and permit companies to innovate and develop business models that include financial advice that is both accessible and affordable; and identify ways of encouraging consumers to get financial advice by eradicating all the obstacles that prevent them from doing so at present.
The review aims to examine a wide range of financial products such as savings, insurance, pensions, and mortgages. A report will be presented at the budget of 2016. The review will be conducted under the leadership of the FCA and the Treasury along with an advisory panel of consumer and industry representatives chaired by Scottish Widows Chairman Nick Prettejohn.
The Treasury wants to ensure affordable, high-quality, and customized financial advice to all citizens so that they can make well-informed decisions on financial issues.
Harriett Baldwin, the Treasury’s economic secretary, said;
Making sure that our financial services sector supports working people at every stage of their lives is a key part of our long-term plan. That’s why we’ve launched a major new review to explore 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.
Huw Evans, director of the Association of British Insurers, called it
a welcome step” and said: “The new pension freedoms have highlighted how important it is that proper advice is accessible to all, not just those that can afford it.
Currently, financial advisers are burdened with strict regulations. Chris Hannat, the director general of the Association of Professional Financial Advisers, said that his association has been campaigning hard for a long time to reduce this burden. He said that the association welcomes the move to review accessibility to financial advice, but believes that the current regulations need to change.
