The UK's financial services regulator The Financial Conduct Authority (FCA) has launched its review of financial advice outlining concerns and has asked for advisers and industry to respond to the impact of changes of the last few years, following the landmark Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR).
The FCA said that it's latest review, which will be published in 2020, will consider whether the RDR and FAMR initiatives have been successful in achieving their objectives. and has asked the industry for its comments via a 'Call for Input' feedback survey. Once it has all of the responses the regulator will look to update rules and regulations that could forever change the way that financial services are sold and distributed in the UK.
The review will look at what consumers want from the financial service market and how the market works to deliver this. It will also consider how new market trends and developments might affect the future development of advice and guidance services.
Christopher Woolard, executive director of strategy and competition at the FCA said: "Millions of people look for help and support in making financial decisions every year and the aim of the RDR and FAMR was to help the market develop the right advice or guidance services consumers need to make those decisions.
“Financial advice can help people make the most of their retirement, but at the moment the market is not working for the majority of consumers" - Hugh Savill, director of regulation at the ABI
"Consumers and the market are changing rapidly, as technology, employment patterns and inter-generational challenges change the way consumers interact with financial services. As well as looking at how the market has evolved since RDR and FAMR, it's important that our work looks ahead to see how we ensure that this important sector works well in the future.
"We want the market to deliver a range of good quality, affordable advice and guidance services that meet consumer needs."
The FCA is seeking initial feedback to the Call for Input by 3 June 2019. The FCA added that it will hold several stakeholder events, and collect further data through consumer research and surveying a sample of firms. It intends to publish its final report in 2020.
Hugh Savill, director of regulation at the Association of British Insurers, welcomed the review. "Financial advice can help people make the most of their retirement, but at the moment the market is not working for the majority of consumers," he said.
"The measures proposed in the Financial Advice Market Review were supposed to lower costs and narrow the advice gap, but this has not materialised in reality. We welcome today's Call for Input and look forward to engaging comprehensively on this important issue."
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