TISA’s insight on market response to Financial Advice Market Review
Greater clarity and consumer engagement around guidance and advice needed from the industry
At a TISA (the financial services membership association) event about the Financial Advice Market Review (FAMR), leading experts from across the industry discussed the need for greater clarity, access and consumer engagement to address the lack of understanding and confusion around the distinction between guidance, and advice and the different forms of advice that are available.
Speaking at the TISA event, Charles McCready, TSIP1 Programme Director provided an insight on the market response to FAMR. The key issues highlighted were a general lack of consumer understanding of both the need to manage personal finance and how to do so, as well as how to develop appropriate guidance and advice services that align with consumer needs, providing support in a cost effective way.
The need to help consumers manage their finances is clear. Recent research by the Money Advice Service (MAS) identified that 40% of adults are not in control of their finances, which is leading to higher levels of debt, low levels of saving and financial insecurity in both working life and in retirement. MAS also found that 12 million people are not saving enough for retirement, with two-thirds not knowing how much they need to save or if the amount they are putting aside is sufficient.
Charles McCready, TSIP Programme Director said:
“Whilst TISA has focussed its response on proposals for guidance services, much of the industry is also trying to address access to financial advice and how these services are provided as this remains a challenge for both the Government and financial services. Much of the focus of the FAMR is centered on how to fix the ‘advice gap’, and the industry responses show that there are significant opportunities to both simplify the advice services that consumers receive, whilst simultaneously developing those services that fits people’s needs and their appetite to pay for advice.
“At the heart of the proposed changes lies the need for greater clarity and simplification around the rules of advice and the options available to consumers. There is also a growing appetite amongst the financial services industry to align advice regulations with MiFID and EU regulations and remove some of the additional requirements placed on them in the UK. This would move us closer to a single EU set of standards, retain consumer protection and facilitate a reduction in additional compliance costs that could be passed onto the consumer. We have also heard a strong call for the interpretation of rules to be made clearer so that the FCA, the financial services industry and FOS are all operating under the same understanding of those rules.
“Additionally, there is a critical role for technology to play through greater use of online tools, particularly for information and guidance services, to help consumers understand how to better manage their finances. In an ever changing environment, it is important to find new ways to appeal to younger savers who have new perspectives and attitudes to savings. FAMR is a particularly important initiative in seeking to address the key issues that are affecting the financial health of both households and individuals.
“We want to work with HMT, FCA and FOS to help the industry provide appropriate guidance and advice support for consumers, enhance their financial wellbeing, and encourage a savings culture.”
For further information please contact:
Alistair Kellie / Sara Neidle / Nick Morris – Telephone: 020 7680 6550 / Email Alistair.Kellie@newgatecomms.com; Sara. Neidle@newgatecomms.com; Nick.Morris@newgatecomms.com
Email: TISA@newgatecomms.com
Notes for Editors
TISA is a not-for-profit membership association operating within the financial services industry. The focus of our recommendations and actions is improved outcomes for consumers and UK plc with this approach leading to a stronger UK financial services industry.
TISA’s growing membership comprises over 150 firms involved in the supply and distribution of savings and investment products and services. These members represent many different sectors of the financial services industry, including asset managers, insurance companies, fund managers, distributors, building societies, investment managers, third party administrators, consultants and advisers, software providers, financial advisers, pension providers, banks and stockbrokers.
Having a legacy of focusing predominantly within the tax incentivised products area, TISA has in recent years moved into the broader savings and investments world, extending our standing as trusted adviser over a much greater remit.
TISA has a successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for the public. Effective policy and regulation and the creation of efficient industry infrastructure continues to be the major focus for our members. TISA is unique in that it represents the entire financial services industry, incorporating cross-sector policy, industry and technical expertise. Whilst we maintain a solid partnership with government, the regulators and wider industry, we remain independent and develop neutral views and opinions. This impartiality is reflected in our ability to drive development projects which improve industry performance and consumer outcomes, putting us in the unique position of being able to constantly challenge the status quo to bring about material improvement.
1 The Savings and Investments Policy project is working with a wide range of financial service companies, trade bodies and consumer groups to develop these pan-industry proposals. It is directed by an Executive Committee formed of 19 leading financial services companies including Aviva, AXA Wealth, BlackRock, BNY Mellon, Columbia Threadneedle, EY, Genpact, Henderson Global Investors, Invesco Perpetual, J.P. Morgan Asset Management, Legal & General, Lloyds Banking Group, Nationwide, Northern Trust, Old Mutual, Openwork, Pinsent Masons, RBS and TISA.