Jasmine Smiley, Chair, SPP Financial Services Regulation Committee, said; “Many SPP members have indicated that the existing advice/guidance boundary can sometimes act as a constraint on the services and support they are able to provide. As a result, SPP supports the FCA decision to review this boundary.
SPP believes that further clarifying the boundary could be helpful for some, including pension trustees, and that a new targeted support regime, which sits between guidance and regulated activity, could create an opportunity for many firms to be able to better support consumers if properly considered and carefully implemented. We also support simplified advice in principle, but more information is needed to ensure that it offers consumers value for money.
In short, the review is certainly a step in the right direction.”
Jen Norris, Director in Isio’s Reward and Benefits division, said: Make immediate changes to the Income Tax exemption of £500 for advice. There is confusion on both what it can and can’t cover and the associated tax implications. There are various ways that this could be addressed but we’d suggest making changes. Principally, we would like to see the removal of the ‘pensions only’ nature of this as our experience tells us that individuals want to talk more holistically about their finances, and can often only consider increasing pension contributions once they’ve understood and addressed debt and affordability. The current restrictions are in conflict with this and also worry employers because of the tax and benefit-in-kind implications.
Actively encourage effective, tailored financial coaching to be offered via both employers and providers. If done correctly (holistic and specific to the individuals circumstances and employment benefits package), this provides clarity and confidence to the individual, often avoids the need for full advice, and is cost effective for the masses. We know from our recent survey (in conjunction with YouGov) and our experience coaching individuals, that what people want from their benefits and support differs wildly depending on age, gender, ethnicity and socio-economic backgrounds, and they will only engage when the benefits and support offered is relevant to them.
Mark Campbell, Head of Wealth Proposition Development in Isio’s Wealth Advisory division, added the following: ‘’Financial advice is complex, but the route to financial advice is also varied and potentially difficult to navigate. We propose that advisory firms should be expected to provide both guidance and advice and be able to assess and justify the level of support needed, while managing the conflict of interest that exists within the advice v guidance cost and profitability model.
The industry requires clarity around the boundaries of advice and guidance and requires a consistent, cost effective system of oversight across both that is reflective of the risk to individuals. This will reduce the cost burden to advisory firms and ultimately individuals, create confidence in the industry and ensure the industry flourishes by appropriately addressing the needs of those it serves. We believe that the ultimate goal should be that each individual is able to get the help they actually need at a fair price.’’
Isio will be responding to the Review in due course.”
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