The Thoresen Review needs to concentrate on five key areas for a national approach to generic advice, claims the Resolution Foundation.
In response to Otto Thoresen’s ‘Call for Evidence’ consultation, the research and policy organisation is calling for funding to be earmarked in the government’s Comprehensive Spending Review (CSR) which is scheduled for later this year.
It says it believes generic financial advice “is the key to delivering a step change in financial capability among UK consumers”, and suggests any national approach should be developed to coincide with the introduction of personal accounts in 2012.
And it says if a national generic advice network is to be successful the Thoresen Review should focus on five key areas:
- Brokering a funding agreement which recognises the benefits that generic financial advice will deliver to consumers, the government and the financial services industry
- Clarifying how generic financial advice can be applied in real life situations so that clear, effective advice can be given to consumers
- Co-ordinating the development of generic advice with the introduction of personal accounts so people get the advice they need on their pension options
- Identifying a brand for the advice that captures consumers’ imagination and appeals to those on low to moderate incomes who are most in need of it
- Harnessing the latest learning about how to influence human behaviour to encourage people to take action and make better financial decisions in response to the advice they receive
Previous research published by the Foundation suggests a national generic advice resource could be delivered for around £50m a year, and argues greater access to financial advice could benefit consumers by up to £60,000 over their lifetime, and deliver welfare savings of approximately £100m within 10 years.
Sue Regan, chief executive of the Resolution Foundation, says: “Generic financial advice will be the jewel in the crown of the government’s financial capability strategy. It is vital the momentum generated by the Thoresen Review is maintained and that funding for it is prioritised in the Comprehensive Spending Review.”
The initial consultation published by Thoresen in March, at a conference hosted by the Resolution Foundation, closes on 27 April with Thoresen asking for “insights and experience of running an advice system to the public, to enable us to learn from others and develop a solution based on practical evidence.”
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