The Personal Investment Management & Financial Advice Association (PIMFA) has called upon the Government, regulators and advice industry to work together to improve consumer access to financial advice.
The trade association has published 12 recommendations in its “Future of Advice” policy paper that it believes will help consumers better engage with advice and increase professionalism across the advice and wealth management industry.
The recommendations include a review of the definition of advice; a review of the regulatory perimeter; the approval of financial promotions to become a regulated activity and stronger regulatory controls regarding the exemptions for high net worth and sophisticated investors; as well as improved online consumer protection from financial scams through the Online Safety Bill.
In addition, PIMFA has outlined the need for effective implementation of the financial capability strategy; the promotion of the value of advice and the financial advice sector; effective sign-posting to advisory services; the creation of new, lower cost advice services as well as the provision of a regulatory framework to support simplified advice and a review of the handbook to ensure a clearer, effective and cost-efficient regulatory environment.
Lastly, the paper has recommended a review of and improvements to the current FCA supervisory regime and the promotion of high standards of behaviour and competence across the whole sector.
PIMFA’s recommendations follow a recent YouGov survey which revealed that the overwhelming majority of consumers (90%) had never paid for financial advice and 79% of those who had not taken advice had no intention of doing so in the future. While a lack of awareness around the benefits was a leading reason for consumer’s reticence, trust in the profession was cited as another factor.
Liz Field, chief executive, PIMFA, said: “There is now, more than ever, an increased need for financial and investment advice and support but most people still don’t engage with financial advice, seeing it as an expensive service for the well-off. PIMFA believes that access to advice should be an affordable option for everyone in the UK.
“PIMFA is committed to broadening consumer access and to creating the best environment for the financial advice and wealth management profession to deliver their services and meet their clients’ needs. We recognise that none of the recommendations we put forward can be implemented overnight. But if we are to create an industry fit for the future that ensures professional advice for all, it is vital the industry, regulators and government work together.”
PIMFA has already begun work on its mission and urged the government to review the regulatory perimeter last year. It also called for regulation of financial promotions as well as improvements to the supervisory regime.
The trade body said its immediate priorities this year will be to lobby Government and to work with stakeholders across the industry, consumer groups and the regulator to ensure that economic harms are included in the upcoming Online Safety Bill to provide greater protection to consumers from financial scams.