UK financial advice trade body PIMFA has urged the new government to show that it has designs beyond Brexit, asking policymakers to work together in order to build a culture of saving and investment across the UK for the long term.
Liz Field, chief executive of PMFA said: “We are committed to building a culture of saving and investment across the UK and this starts with ensuring that policymakers are able to create an environment where ordinary retail savers can thrive. We look forward to working with the new government in moving towards this goal.”
To do this, she says, the Government should:
1. Put in place a framework of smarter regulation to enable an increase in trust in the sector
PIMFA says smarter, targeted regulation is “absolutely necessary to stamp out the poor practice and behaviour that leads to customer detriment, erosion in trust, and substantial increase in costs for well-behaved firms in this market.”
These costs, it adds, are not just the cost of compliance with regulation but the costs of the regulatory bills including the FSCS and PII.
“Not only is the financial cost of firms too high but the unquantifiable cost is the erosion of trust amongst consumers who need the services of our member firms. These costs are not sustainable to provide choice for clients and will price firms out of the market.”
2. Commit to a Financial Capability and Engagement Framework for the UK’s savers
The trade body says while financial education is contained within the PSHE module within schools, it lacks “coordination at national level about what this should contain and to what level.
“This needs to change if individuals are to be informed about their financial needs throughout their life and how to plan their financial future, at all ages but particularly at a younger age so they start saving early.”
3. Work with all employers to roll out financial check-ups undertaken by a regulated financial adviser
PIMFA is calling for organisations to provide ‘financial MOTs’ at age 30, 40, 50 and 60 undertaken by a regulated financial adviser.
“The two elements of auto-enrolment/workplace pensions and a financial MOT will encourage greater savings and investments, thus enabling individuals to provide more for their own retirement and relying less on the state at retirement age.
Field adds that as “representatives of a community of wealth creators in the UK… we will do our utmost to ensure that this community is at the heart of any plans which go towards building a culture of saving and investment.”
PIMFA will be holding a Parliament Day on 23 January and is encouraging its members to participate in raising the awareness of this industry.
