A member of the Financial Services Consumer Panel has argued money collected through FCA fines should be used to fund a national advice network to help bridge the post-RDR advice gap.
Speaking to Money Marketing, Consumer Panel member Teresa Fritz cites the not-for-profit organisation The Pensions Advisory Service as a good example of the kind of guidance service which could be “upscaled” to provide generic information for people who cannot afford advice.
Fritz, who has worked for over 35 years in financial services, including as a principal researcher for consumer organisation Which?, says: “One idea could be funding a service like that through the fines the FCA makes on companies. If you think about how much the FCA collects in fines every year from the industry, why can’t they go into funding a national advice network?”
Fritz argues that funding from FCA fines could build a quality guidance service, potentially as an additional layer of the Money Advice Service.
Fritz adds: “[This kind of service] could get people up to a point where they understand what product they have to buy, and explains they now need to speak to an adviser to see which provider to buy from.
“That information would then ideally be passed to an adviser of the consumer’s choice, who has even less to do because they are getting an educated and empowered consumer, as well as a fact find. Advisers can then take them on the last bit of the journey at a very low cost. That is the ideal picture.”
Hudson Green & Associates principal Ian Hudson says: “It would be nice to see fines used to drive value for the consumer to help get them further down the advice process at a cheaper cost.”