The Later Life Academy (LLA), the commercial and training organisation for later life advisers, has today (14th December 2015) issued formal responses to both the FCA/HM Treasury’s Financial Advice Market Review (FAMR) and HM Treasury’s Public financial guidance consultation.
The FAMR was launched earlier this year to examine how financial advice could work better for consumers. It will consider the current regulatory and legal framework governing the provision of financial advice and guidance to consumers, and its effectiveness in ensuring all consumers have access to the information, advice and guidance necessary to empower them to make effective decisions about their finances.
In the Public financial guidance consultation the Government has been seeking responses on how the provision of free-to-client, impartial financial guidance should be structured to give consumers the information they need to make financial decisions.
The comprehensive responses from the LLA focus on key areas which need to be addressed if the UK is to have a financial advice network which is both fit for purpose and accessible to all. The LLA believes a ‘consumer-centric’ approach needs to be taken — one which understands that consumers have different needs requiring information, guidance or full advice as appropriate.
In its response the Academy suggests such an approach needs to be linked with greater improvements in financial competency so that the value of the information, guidance or advice is appreciated and to proactively help reduce the numbers getting into debt. One suggestion from the LLA is that a ‘digital personal financial hub’ be developed for every individual which would aid their engagement with financial institutions and increase financial competency.
Specifically focusing on those individuals who are in the period approaching retirement, at retirement or in retirement stages of life, LLA is concerned that advice channels are restricted for those on lower to middle-incomes. It is looking for a much wider brief and remit for the PensionWise service arguing it should not be restricted to the ‘at retirement’ options but could become the go-to point for all pension issues that arise throughout an individual’s life.
The Academy believes PensionWise should be the help and support brand of TPAS (The Pension Advisory Service). TPAS would drive all initiatives but would also be empowered to utilise other agencies in order to ensure successful delivery. If individuals are able to access this service, not just at retirement, but throughout their lives then the Academy believes they should become much more comfortable with the choices they have, the guidance they are being given, and are much more likely to make them engaged with fuller financial advice options.
The Academy also believes those on income-based benefits are the most vulnerable when it comes to making the wrong choices at retirement and suggests all those within this group be proactively invited to a Citizens Advice Bureau for a face-to-face session on their financial situation and the impact of any pension options they might have.
LLA has now issued its full responses to both consultations. They can be viewed in full by visiting the Academy website at: www.laterlifeacademy.co.uk
LLA was launched in 2014 and offers later life advisers across product areas such as equity release, long-term care, and annuities, with access to training and sales support. At the same time it is developing commercial opportunities for members through its relationships with Product Ambassadors.
Bob Champion, Chairman of the Later Life Academy, said:
“Essentially these two consultations are inter-linked and therefore require an alignment of both response and action. The Academy’s focus with our response is to recognise a number of key issues and problems; by solving them we believe we will have a much more engaged, financially aware and developed group of individuals who are able to recognise the value of both guidance and advice far earlier in their lives, and at the same time have better access to advice and the bespoke solutions that each of them will need.
“We also believe that action is required around capacity in the marketplace — at present advice is undoubtedly restricted in a number of ways, either via cost, understanding, limited savings, the list goes on. We believe a new advice model is required which ties in the Government- run initiatives like PensionWise, broadens their scope of offering, and at the same time sign-posts the private sector advice offering, what can be accessed, how it will benefit individuals, and why they will be better off moving through the Guidance/guidance-plus/advice process that the Academy is developing for those requiring later life advice from our members.
“This is a pivotal moment for the ongoing delivery of financial advice in this country, particularly when it comes to individuals preparing for retirement and having the understanding and capability to be able to provide for themselves after work. We need to offer a solution which engages far more people than currently access professional advice and by developing and broadening the range of guidance provided, coupled with the services that will soon be available through the Academy itself and our members, we should be able to signpost a much smoother path through this process.”