FAMR has not closed the advice gap, advisers rule
By Hope William-Smith
Only one in seven advisers believe that the measures introduced in the FCA’s Financial Advice Market Review are helping to close the advice gap.
Despite widespread positive support for FAMR’s measures around streamlined advice and tax breaks for employer-arranged advice, a survey from Aegon shows advisers do not think they are helping individuals take advantage of full financial planning services in practice two years on from the release of the final FAMR report.
While 70 per cent of advisers agreed with the new definition of regulated advice, 69 per cent said it is not helping more people access advice.
Nearly half the respondents said clearer guidance on what can be provided through streamlined advice was a positive, but only sixteen per cent believe it will have a “real-life” impact.
Just eight per cent of respondents said that new factsheets for employees and trustees to clarify what financial help they can provide without straying into advice is helping the advice gap.
A joint Money Marketing/Zurich survey earlier this year found 80 per cent of adults had not heard of the pensions advice allowance, which ups the cap on funds that can be drawn from pensions tax-free to pay for financial advice from £500 to £1,500.
The Aegon research shows just 37 per cent of advisers believe the move is contributing to closing the advice gap.
The concept of the pensions dashboard has the support of 69 per cent of advisers in total. Just 45 per cent of advisers believe its introduction, planned for 2019, will help close the advice gap however.
Aegon director of pensions Steven Cameron says the industry should continue to work alongside the regulator to “turn major opportunity into practical benefit.”
He says: “FAMR presented a huge opportunity to address the advice gap. When it comes to how effective these have been in practice, the findings are very disappointing.”
The FCA plans to review the impact of FAMR alongside the RDR in 2019.