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UK launches review of financial advice market
[LONDON] Britain has launched a review into the way consumers access financial advice amid concerns of an "advice gap" following recent changes to the pensions and savings industry.
Those changes, which allow individuals more freedom over where to invest their retirement savings, have come as many banks and financial advisers ditch less profitable, poorer clients or exit the industry altogether.
While the government has set up several routes for individuals to get guidance, such as a website and helpline, there are concerns this is not enough and that those in the weakest position stand to lose most from a lack of advice.
In a statement on Monday announcing the Financial Advice Market Review, Economic Secretary to the Treasury Harriett Baldwin said the review would look at what else can be done to help consumers access high quality and affordable advice.
It aims to examine whether there is an advice gap; to make sure the current rule book helps firms to provide affordable and accessible financial advice; and look at ways to encourage people to seek advice.
Led by the Treasury and the regulatory Financial Conduct Authority, it will consist of an expert advisory panel with members including Nick Prettejohn, chairman of Scottish Widows.
The review will consider all types of retail financial products including pensions, savings, mortgages and insurance, and will report ahead of the Budget in 2016, the government said in a statement.
Responding to the announcement, Danny Cox, chartered financial planner at investment platform Hargreaves Lansdown , said the government plan to provide everyone with financial advice was unrealistic as not everyone wanted advice.
On the issue of the advice, Mr Cox said the numbers of authorised advisers had risen since 2012, although there was a shortage of those prepared to offer transactional advisory services, with most looking to do broader financial planning.
"Banc assurer services which used to perform transactional advice are almost non-existent with most pulling out of the market," he said. Hargreaves provides telephone-based advice for those with from 20,000 pounds or more to invest.