Financial Advice Could be Made Cheaper

“For those who can afford it, high-quality regulated advice from qualified practitioners will continue to be a valuable service”.

In general the move has been welcomed by the financial advice industry. They need to be able to access investment in a cost-effective way if they are to provide adequately for their futures.

“That’s why we’ve launched a major new review to explore what more can be done to make sure consumers can access high-quality and affordable advice so they can make informed decisions with their hard-earned money”.

The review will consider all types of retail financial products including pensions, savings, mortgages and insurance, and will report ahead of the Budget in 2016, the government said in a statement.

Those changes, which allow individuals more freedom over where to invest their retirement savings, have come as many banks and financial advisers ditch less profitable, poorer clients or exit the industry altogether.

Mr Hannant said: “We are particularly pleased that one of the issues under examination will be the interaction between the regulatory framework for advice and the role of Fos and the FSCS in redress; consumers need to understand that investments can never be 100 per cent risk-free”.

Banks and investment firms could have to offer more financial advice for customers who are not rich enough to hire traditional financial advisors, as the result a Treasury review to be launched this Autumn. Advisors now have to charge a fee, rather than relying on commission and have to be completely independent to ensure their service is unbiased.

In a statement on Monday announcing the Financial Advice Market Review, Economic Secretary to the Treasury Harriett Baldwin said the review would look at what else can be done to help consumers access high quality and affordable advice.

As part of the government’s plan to support working people at all stages of their lives the government also intends to consult later in the year on how the current statutory arrangements for the provision of free and impartial financial guidance (including the Money Advice Service and Pension Wise) can be made more effective.

‘So the Government’s review, which we warmly welcome, must be focused squarely on how to give consumers more power to make better financial decisions at all the important moments in their lives. “The cost of advice can be complicated and varies widely, so it is critical that people know they are paying a fair price and do not feel frozen out of the market”.