A collaborative project between the FCA and the Treasury could have a profound impact on the future prosperity of the nationby Paul Feeney / September 14, 2015 / Leave a comment
Working at a business that has an intimate relationship with the adviser community, I am fortunate enough to witness first-hand the remarkable impact that quality financial advice has on people’s lives.
It empowers people to protect their families against difficult times, build a financial legacy for their children and realise ambitions in their personal life that would not otherwise be possible without the solid foundations afforded by a reliable financial plan.
Yet many people choose not to take advice, often with troubling consequences. The new pension freedoms provide a perfect example of the risks faced by consumers that go without counsel from an expert. While offering consumers a welcome opportunity to take responsibility for their retirement income choices, pension flexibility also presents challenges. A spike in fraudulent pension activity and the tendency of some savers to dis-invest and park their life savings in cash are just two examples of the pitfalls many people are inadvertently stumbling into.
Recognising those risks, the Government demands that investment and pension companies such as Old Mutual Wealth highlight key risks and prompt customers to consider taking advice. It is now advancing further by announcing a formal review of the advice market. This promises to address both the supply of quality financial advice and also consumer demand for the right financial support. Specifically, it promises to “address barriers which put consumers off seeking advice” and confront “regulatory or other barriers firms may face in giving advice and how to overcome them.”
So, what are these barriers and how can we overcome them?
Firstly, the industry must acknowledge that it has not done enough to explain the benefits of financial advice. You could have a 53 pe…