St. James’s Place (SJP) welcomes the FCA and HM Treasury consultation on the ‘Advice Guidance Boundary Review’ to address the widening advice gap in the UK.
In response to the consultation, James Heal, Director Public Policy at St. James’s Place, said: “We fully support the need to bridge the advice gap; a challenge that demands regulatory change. As a firm committed to helping clients plan and manage their financial futures, we believe this initiative is vital for the overall financial wellbeing of UK consumers who do not currently receive advice.”
Addressing the Advice Gap
SJP believes increasing the supply of advice is a fundamental part of closing the advice gap. There are significant challenges posed by factors such as an ageing population of advisers and perceptions that may deter individuals from seeking advice due to perceived complexity or insufficient funds. SJP is actively contributing to addressing this issue through its Academy, which produces hundreds of graduates annually to meet the industry’s evolving needs.
Financial education should be part of the long-term solution and SJP encourages collaboration with the Department for Education to explore curriculum changes that can enhance financial literacy.
A summary of SJP’s response to the proposals:
Clarifying the boundary
- SJP is fully supportive of this proposal.
- The proposal to clarify the boundary between advice and guidance will need to provide specific examples of what support can be provided to consumers without it falling under regulated advice.
Targeted Support
- Targeted support presents a great opportunity to support consumers to make more informed financial decisions.
- SJP would urge that targeted support should not look or feel like advice to the consumer to avoid consumer confusion and detriment. There is sufficient scope to offer consumers more support than is commonly available today without straying into a service that would be perceived as advice to the consumer.
- Targeted support will work best and be safest if it is a process to provide consumers with the information and help, they need to be able to make better decisions.
Simplified Advice
- SJP agrees that there is a space for a form of simplified, targeted, cheaper and quicker advice, alongside full holistic advice.
- This proposal could be particularly helpful for consumers who are wanting to invest for the first time.
- The challenge with this proposal is balancing the need to deliver an affordable service for consumers whilst also ensuring it is a commercially viable option for firms to offer such a product.
James Heal continues: “It is vital that the industry, policymakers, and the Government continue to work together to help broaden the help available to consumers. The current provision of guidance information and full holistic advice needs to be increased from both sides. Part of the solution for the advice gap is providing more advice, which is largely a matter of supply. We must also ensure that we have the right structures in place to retain and attract financial advisers to the industry”.
