He pointed out that “FAMR was tasked with finding avenues to provide affordable and accessible advice and guidance to everyone”.
Mr Thompson noted it has failed and “has not enabled the industry to offer meaningful financial guidance in support of a public service.”
He, along with many others, warn one of the unintended consequences of all the FCA reviews has been the reduction in the number of financial advisers around.
With less competition, that in turn increases the cost of advice, which makes it even less attractive to many people.
Simon Cowley, wealth management consultant in Walker Crips’ wealth management team, warned all the regulatory red tape may actually have contributed to the bad image the financial advice industry constantly faces.
He explained: “A major consideration is the ongoing issue with ‘phoenix’ firms, where failed advice firms reinvent themselves as claims management companies. Banning this would increase trust and reduce bad practice.”
One voice of reason I always turn to when it comes to industry issues such as these is Hargreaves Lansdown’s head of policy Tom McPhail.
He observes: “Most of the time, most people just want a bit of help and guidance.”
An obvious point, maybe, but worth saying again. After all, the whole impetus of the FCA’s actions is to improve consumer outcomes. Putting consumer needs at the heart of the financial advice is crucial.
Of the latest review, Mr McPhail said: “The availability and the certainty around the quality of guidance hasn’t been adequately addressed yet. Too often firms are still wary of crossing the boundary into inadvertently giving advice and as a result they stop short of giving the guidance their customers seek.”
That sounds about right to me. But is it?
On advice, Mr Thomson said: “Trusted, insightful financial advice is the best way for people to achieve financial security and prosperity.
“Greater political emphasis needs to be placed on the importance of expert financial help, whether that is guidance, debt support, help [with] budgeting or professional financial planning.”
I agree.
Simon Read is a freelance journalist
