As more advisory firms move up market, the Government will need to fund a financial advice service f...
As more advisory firms move up market, the Government will need to fund a financial advice service for the less well off.
That is the conclusion drawn by Jane Vass of the Consumer Policy Institute, whose report, 'Where next for financial advice,' was published last week.
In the report, which was sponsored by the Life Assurance Association (LIA), which itself is arguing against the further weakening of polarisation, Vass acknowledged there was 'decreasing access to advice' for some sections of the public.
She concluded mass affluents, those with between £50,000 and £100,000 to invest, are well served, particularly now the banks and groups like Bradford & Bingley have moved to develop their advice and wealth management services.
Vass said below this level if the Government wants to promote personal responsibility for savings, it will have to pay to establish 'advice gateways' for those excluded from the mainstream advice market. This could be through high street kiosks, across the internet as in the US, or via advice through the workplace.
However, Vass said that although the advice channel has much work to do, particularly in terms of raising skill levels and regaining public confidence, it would be a mistake to expect to be able to alter it to cater for all levels of income without Government support.
She said: 'We may also have to face the fact that there are likely to be some customers who are never likely to be attractive customers to financial institutions because of their low income. If so, although improving the quality and simplicity of products will help, it is unlikely to be the whole answer. Some form of free advice will be needed.'
Vass added that organisations currently providing generic advice, like Age Concern, could not fill the advice vacuum.
An ambitious objective
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'Illusion of control'
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Total investment reaches £9m