The 28 proposals resulting from the joint FCA/Treasury review, which chancellor George Osborne initiated in August last year, also include an amendment to the definition of advice.
This would narrow the definition of regulated advice so that it is based on a personal recommendation, and by creating a single definition would remove some of the barriers that exist for firms wishing to offer guidance services.
The overall aim of FAMR was to find solutions for the growing gap between consumer demand for financial advice and the current extent of what the industry offers within the UK regulatory framework.
The FCA said the findings showed a clear need for intervention by the regulator and government to help both consumers and industry benefit from new and more cost-effective ways of delivering high quality advice and guidance.
More transparency
The government was urged to explore ways to improve the existing income tax and national insurance exemption for employer-arranged pension advice.
It also tackled the thorny question of how to fund to the Financial Service Compensation Scheme (FSCS), proposing alternative ways of doing this so financial advisers can plan ongoing costs more effectively.
Measures to improve the transparency of the processes and decisions of the Financial Ombudsman Service (FOS). One angle covered here was that FAMR found relatively few complaints related to advice given by independent financial advisers 15 years ago or more, so it has has ruled out recommending a 15 year long stop as this would inappropriately limit protection for consumers on long-term products.
