FAMR working group stalls on advice vs guidance definition

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The Financial Advice Market Review’s working group has stalled on work to separate “guidance” and “advice”.

After the FAMR released its recommendations in March, the FCA established a 15-strong working group of industry leaders to take forward a number of the review’s proposals.

This included publishing “a shortlist of potential terms to describe ‘guidance’ and ‘advice’, with the final choice of words and approach to implementing them to be confirmed after market research and consumer testing”.

The shortlist was due to be published in either the third or fourth quarter of 2016, but is now unlikely to be finalised for several months.

It is understood that the group has conducted preliminary work with consumer focus groups and has several meetings scheduled later in January and February, but could not meet an “ambitious” timeframe to conduct its work.

It is also understood that the group wanted to wait until a Treasury consultation on amending the definition of regulated financial advice had closed.

The consultation launched in September and ran for eight weeks.

The FAMR working group is chaired by Scottish Widows chair Nick Prettejohn, and includes both advice firm representatives such as St James’s Place chief executive David Bellamy, consumer champions such as Which? Policy and campaigns director Alex Neill, and banking representatives such as Barclays personal banking chief executive Steven Cooper.

As well as defining “guidance” versus “advice”, the group is also charged with designing “rules of thumb and nudges” to draw people to saving and advice and working with employers to develop a best practice guide to support employees’ financial health.

The guide is set to be published in early 2017, while initial testing on the rules of thumb and nudges should also be completed by the first quarter of the year, according to the original FAMR timetable.