The government has launched a major UK-wide review to examine how financial advice could work better for consumers.
The Financial Advice Market Review will look at all types of retail financial products, including pensions, insurance, savings and mortgages.
The review will consider ways to encourage people to seek financial advice and to remove any barriers that may discourage them from doing so, as well as examining the ‘advice gap’ for those who are not significantly wealthy.
It also aims to ensure that the regulatory and legislative environment encourages firms to innovate and grow their business models to include financial advice that is accessible and affordable.
It will be led by HM Treasury and the Financial Conduct Authority (FCA). An advisory panel of industry and consumer experts will be chaired by Nick Prettejohn, chair of Scottish Widows.
The findings of the review will be reported ahead of the 2016 Budget.
Harriett Baldwin, economic secretary to the Treasury, said: “Making sure that our financial services sector supports working people at every stage of their lives is a key part of our long-term plan.
“That’s why we’ve launched a major new review to explore 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.”
Andy Briggs, chief executive officer of Aviva UK and Ireland Life, added: “Good advice makes a huge difference to people when they are navigating their choices on savings and retirement, but the rules today have not kept pace with people’s needs.
“Customers should more easily be able to get low-cost or free guidance from providers alongside their right to pay for more bespoke, personalised advice.”
Darren Philp, director of policy and market engagement at The People’s Pension, said: “Regulation has created an artificial divide between guidance and advice and this is a recipe for confusion. It is clear to us that advisers are between a rock and a hard place, and often cannot give the help and information that is all most consumers need.
“We know that consumers are put off seeking advice because they have to pay for it. Government initiatives like Pension Wise can help fill a gap, but they are no substitute for making sure that those that would benefit from advice are able to receive it.
”We would like a situation where advisers are able to add value for all those who want it, regardless of whether this is from a simple chat or a detailed financial plan.”