The Association of IFAs (AIFA) has welcomed the Thoresen Review's proposal for a Money Guidance service, saying it will educate consumers and benefit the adviser community.
Chris Cummings, director general of AIFA, also applauded the plan to use the FSA levy to raise funds from the industry arguing it would keep administration costs to a minimum.
The Thoresen Review, a project overseen by AEGON UK chief executive Otto Thoresen, yesterday unveiled plans for the Money Guidance scheme, arguing it would provide UK residents with the knowledge, understanding and confidence to make better decisions about money issues.
Chiefly targeting the 7.5 million people seen as most vulnerable in society but open to everyone, the service would provide information and guidance on budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits, and jargon busting.
However, Money Guidance would be ‘sales free' and so stop short of recommending specific products, the Review stated.
“AIFA has supported Thoresen's work throughout the review and we welcome the final recommendations published today,” Cummings says.
“The industry and government must work together to engage consumers and encourage them to consider their long-term financial wellbeing.
“The Money Guidance service will provide a basic level of financial information and act as a signpost for consumers to access more detailed personalised financial advice.”
Research carried out by NMG on behalf of AIFA recently suggested professional advice for the UK's 24 million households could see a national personal debt reduction of almost £30bn.
It also estimated within four years of low to medium income population groups receiving financial advice, and only one in ten acting on it, new contributions to medium term savings plans would increase by £1.5bn net.
Cummings says Thoresen’s plans to finance Money Guidance are welcome.
“We agree with the proposal to use the FSA levy to raise funds from the industry as this will keep administration costs to a minimum but will ensure charges are proportionate to the benefit received by sections of the industry,” he says.
“We also support the inclusion in funding the service of those governed by the Consumer Credit Act and National Savings and Investments (NS&I).
“We look forward to giving our support to the pathfinder programme.”
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