Moreover, the labels attached to advice are unhelpful and should be reviewed, said Old Mutual. Meanwhile the government and regulator should develop a foundation of face-to-face financial advice to close the advice gap for those with “limited wealth.”
Awareness about financial advice could be actively encouraged by the government through public campaigns, added the wealth manager.
The Treasury and Financial Conduct Authority (FCA) review aims to examine the advice gap, barriers to growth in the market, inhibitors to consumer demand for advice and the role of technology in advice.
In response, Old Mutual Wealth is calling for four main points: a change to the regulator’s statutory objectives, a foundation tier of regulated advice, measures to address consumer attitudes towards advice and a reform of consumer redress and complaints procedures.
The FCA should assume a renewed focus on backing and promoting financial advice – best achieved through “a change to the regulator’s statutory objectives to include an aim of supporting financial advice”, according to Old Mutual.
“We want to encourage the government to work with the industry to find ways to manage the regulatory burden on the sector, to the benefit of both customers and professional financial advisers,” said Richard Freeman, chief distribution officer at Old Mutual Wealth.
“There are a number of hurdles that stand in the way, particularly the compliance demands and associated costs with which many small businesses struggle,” he added.
