FCA opens consultation on broadening consumer access to financial advice

Source: FCA

On Monday HM Treasury and the Financial Conduct Authority (FCA) will launch a joint consultation exploring what can be done to improve customers’ access to financial advice.

The consultation, which is the first major milestone of the Financial Advice Market Review, will focus on the following questions.

What kind of financial advice do consumers want?
Are there gaps between the financial advice that consumers want, and the financial advice that they can access and afford?
How can these gaps be closed?
What role could technology, such as “robo-advice”, play in improving access to financial advice?

The Financial Advice Market Review was launched on 3 August and is examining how financial advice could work better for consumers, building on the government’s pension reforms which have allowed people real choice and freedom over their savings and given them access to free and impartial guidance. The review is being led by Charles Roxburgh, Director General, Financial Services at HM Treasury and Tracey McDermott, acting CEO at the FCA.
Economic Secretary to the Treasury Harriett Baldwin said:

"Helping hard-working people achieve their aspirations at every stage of their lives is at the heart of our long term plan.

"A key part of that is making sure that people can access high quality, affordable, tailored advice and guidance to help them make informed financial decisions, whether that is saving for their first home, taking out a mortgage, buying a car, or saving and investing for the future.

"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."
Tracey McDermott, acting CEO at the FCA said:

"The financial decisions people make can have long reaching effects. It is important that the market provides accessible and affordable advice when people need it.

"The review is a chance for the FCA, government, industry and consumers to work together to ensure we can deliver a market that meets this need."
Nick Prettejohn, chair of the expert advisory panel said:

"It is vital that the financial advice market meets the needs of consumers to enable them to make informed financial decisions at all stages of their life. I am pleased to have been asked to chair the expert advisory panel of industry and consumer voices, to contribute ideas that I hope will improve consumer access to financial advice.

"I look forward to working closely with my fellow members of the expert panel and with Treasury and the FCA."

The consultation will be open until 22 December, and a final report will be published ahead of Budget 2016.

The initial evidence gathering will have a broad scope before narrowing down to consider those areas where the advice gap may be most acute.

The review will be supported by an external expert advisory panel comprising of industry and consumer voices, and chaired by Nick Prettejohn.
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Comments: (1)

Daniel Smith
Daniel Smith - CHOICE Financial Solutions - New York 13 October, 2015, 07:51Be the first to give this comment the thumbs up 0 likes

I am interested by the stated idea of:

 

"...making sure that people can access high quality, affordable, tailored advice and guidance to help them make informed financial decisions..."

 

This seems all well and good, but if the advisor cannot back up that advice with the appropriate product offering and characteristics that actually respond to that customer's personal needs, then the advice has little value.

We've seen for years that tailored advice and appropriate solutions is generally restricted to a very reduced audience, be it large corporates or private banking customers.

To resolve this, FIs need to put in place the capability to democratize these product offerings with an ability to allow general consumers dynamic personalization of off the shelf offerings. This is particularly true in the savings and investment space where current bank technology is simply not designed to be able to handle this need.

Handling this need requires at least 2 key components:

Front line sales and advice tools that allow both branch staff and consumers to understand what different product offerings bring to the table, in a way that is fully transparent with a clear description and presentation of any risks, and other product attributes. We need to ensure that advice and sales are fully compliant and presented in an intuitive, consistent and clear manner. At the end of the day we want and need satisfied customers and good sales.

A new core savings and deposit capability that allows us to provide these product offerings with dynamic attribute adjustment and automated repricing - but without creating any additional operational overhead, and with fully automnated downstream processing and treasury management.

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