The financial services industry has welcomed an amendment to the financial services and markets bill to enable personalised financial guidance.
In the report stage for the financial services and markets bill, debated in parliament yesterday (December 7), Harriet Baldwin MP outlined the amendment, which will give the Treasury the power to make provisions for UK citizens to access personalised financial guidance from appropriately regulated financial services firms.
She said the purpose of this is to support people to make decisions which improve their financial sustainability.
Baldwin highlighted the 92 per cent of the UK population who cannot access financial advice, and called on the government to conduct a personalised guidance review with great urgency.
Baldwin noted the support of the opposition, including the Labour chair of the work and pensions select committee, Stephen Timms, as did former shadow chancellor John McDonnell.
Chief executive of Hargreaves Lansdown, Chris Hill, said the bill will enable a wider group of people, who are not in the position to access financial advice, to receive information relevant to their circumstances now that the UK has “greater freedom” to regulate this matter outside of the EU.
“At Hargreaves Lansdown, we know there is a lot more we could do to nudge clients towards better outcomes under the consumer duty.
“But the rigid rules around advice mean that we cannot personalise these nudges as much as we would like to.”
Prakash Chandramohan, strategic policy director at TISA, said the amendment marks another step down the road to enabling personalised financial guidance.
“During a time of highly polarised politics, it is great to see agreement reached across political parties that more engaging, personalised guidance and support is needed to help people with their financial decision making.
“The tough years ahead cannot be wasted.
“The time will come when this crisis is over, so the necessary foundations need to be in place to support everyone in rebuilding their financial resilience.”
Chief executive of savings and retirement in the UK for Phoenix Group, Andy Curran, said: “Everything that we have learnt from our customers confirms that too few people receive the level of support they need to make what are often complex financial decisions up to and through retirement.”
While paying for financial advice remains the industry gold standard solution, he added, currently not everyone can afford or access this.
“This has created a significant gap, where many people who need detailed, personalised information to support their decision making are losing out due to the current binary definitions of ‘advice’ and ‘non-advice’...we firmly believe that introducing greater flexibility to the current system is vital.”
New bill
The financial services and markets bill, which was introduced to parliament earlier this year, will repeal EU rules over the British financial services industry.
It will give the FCA greater responsibility to set requirements for financial services companies, and require it to promote growth and competitiveness in the sector.
