Without new models in the financial services market the ‘advice gap' is here to stay, a report warns.
A report from the Financial Services Consumer Panel said existing business models within the financial advice market mean the middle ground is being sidelined which has resulted in the 'advice gap'.
This is the result of increasing emphasis on more focused advice alongside other basic non-assisted advice, which offers very cursory analysis to clients.
In addiition, advisory firms are continuing to report reductions - actual and planned - in adviser numbers as well as re-segmentation of their client base. Both factors mean that more clients are moving from the middle ground.
This middle ground is best serviced by simplified advice.
Alongside this, Researching The Advice Gap said that the gap is of concern to policy makers because it coincides with a savings gap, coupled with fears that people with smaller annuity pots won't get adequate advice as they are being pushed into the non-assisted bracket.
However, the report also admits that policy makers do not yet know how to address this gap.
It said: "It would appear that an agreement on the best way of tackling any potential advice gap is far from settled. This calls for more evidence based research, in particular with consumers, to inform the debate."
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