The Financial and Advise Markets Review (FAMR) will also look at the opportunities and challenges presented by new and emerging technologies
A major review that will look at the regulatory barriers financial firms face when giving advice has been launched by Treasury and the FCA.
The Financial and Advise Markets Review (FAMR) will also look at the opportunities and challenges presented by new and emerging technologies to provide cost effective, efficient and user friendly advice services.
The joint consultation wants to look at what can be done to improve customers’ access to financial advice.
The initial evidence gathering will request examples of problems in obtaining advice in general insurance, investments and pensions and mortgages.
FAMR will focus on four main areas:
- The kind of financial advice that consumers want
- Gaps between the financial advice that consumers want, and the financial advice that they can access and afford
- How the gaps can be closed
- What role technology, such as “robo-advice”, can play in improving access to financial advice
A range of possible measures are expected to be introduced after the review.
These range from creating an a regulatory environment which give firms the clarity they need to compete and innovate to fill the advice gap, proposals on whether the regulatory perimeter for financial advice should be amended and an examination of the role that might be played by regulatory carve-outs such as a so called safe-harbour.
The review is being led by HM Treasury financial services director general Charles Roxburgh and FCA acting chief executive Tracey McDermott.
It will also be supported by an external advisory panel comprising of industry and consumer voices, and chaired by former Lloyd’s chief executive Nick Prettejohn.
Economic Secretary to the Treasury Harriett Baldwin said “hard-working” people need to be able to access high quality, affordable, tailored advice and guidance to help them make informed financial decisions.
She added: “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.”
McDermott 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 consultation will be open until 22 December, and a final report will be published ahead of Budget 2016.
In response to the review ABI director of regulation Hugh Savill said: “The new pension freedoms, which are designed to give people more options at retirement, have highlighted how important it is that financial services firms are able to offer consumers the support they need, in a way that suits their individual circumstances”
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