The Financial Services Consumer Panel, the body responsible for promoting consumer issues within the...
The Financial Services Consumer Panel, the body responsible for promoting consumer issues within the FSA, today clarified its proposals for providing centralised low-cost financial advice to low and middle-income earners as unlikely to target the existing market for IFAs and therefore unlikely to crowd them out of the marketplace.
The panel's solution would involve setting up a national high-street presence, such as booths in larger high-street stores, which would give customers a basic "financial health check", and point them in the direction of types of products to consider, but without recommending specific products .
That would leave room for others to provide the additional layer of financial advice needed before selecting and buying a product.
The FSCP says this approach would a significant way towards plugging the savings gap already identified by the industry, helping people get a basic understanding of their own financial positions and leaving them better educated on how to proceed with meeting pensions savings goals.
However, because the proposed scheme would be targeting people who so far have fallen under the radar of IFAs, it would not be pushing IFAs out of their jobs, the panel argues.
Instead, it argues that more financial advisers would be needed if the proposals were to become reality.
The FSCP says that it is not directly calling for government funding of its proposals, but says "it would be in the government's interest to contribute to this…to boost savings."
There are, of course, several barriers to be overcome before the Consumer Panel's vision becomes reality, not least of which will be the recommendations of the Sandler Review.
Then there is the question of government involvement: how likely is it, for example, that centralised advisers would be considered civil servants; and what measures would have to be put in place for the government to feel secure that it could avoid future compensation claims based on allegedly dodgy advice.
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