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FCA: Brexit could hit demand for advice

Europe-Flags-Falling-EU-Dominos-Crisis-Recession-700x450.jpgThe FCA has hinted that Brexit might lead to a reduction in demand for advice.

In a paper this morning the regulator set out how it will judge whether last year’s Financial Advice Market Review is a success, including demand side factors like the number of consumers receiving advice and supply side factors like the number of advisers in the market.

The FCA noted the possible impact Brexit and a persistent low-returns environment could have on these metrics, however.

The regulator noted “ongoing economic and political uncertainty” as Brexit negotiations continue, with firms potentially exiting the market and consumers not having enough confidence to seek advice.

The FCA said: “On the supply side, the uncertainty regarding the EU negotiations could influence firms’ decision making and strategies with respect to the UK market, while on the demand side the uncertainty may impact consumer confidence, which may in turn impact on demand.”

The regulator said low-interest rates may squeeze wallets so impact upon consumers’ ability to get advice, but could also lead more people to seek advice to generate better returns.

The FCA said: “The low returns environment may impact consumer demand for advice and guidance. In this low return environment, consumers may consider that seeking support in relation to purchasing investments is less worthwhile and thus could constrain demand.

“Alternatively, demand could be positively impacted should consumers seek advice or guidance to generate higher returns from investments.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Nicholas Pleasure 30th June 2017 at 1:38 pm

    Do we pay the FCA to come up with this meaningless speculation, which they then contradict in the final paragraph.

    Hot weather this summer may make people less likely to seek financial advice as they enjoy the sunshine. Alternatively, more people may seek financial advice because they want to be able to pay for holidays.

    Stop this pointlessness, reduce our fees and find the crooks that are selling unregulated investments. That’s your job.

    • Julian Stevens 3rd July 2017 at 10:47 am

      Couldn’t have put it better myself. A complete waste of time and (our) money. A classic example of the need for an independent body to oversee and regulate how the FCA uses its resources.

  2. Thanks for the heads up!

  3. Hmmm, so the regulator who’s job is to promote financial advice is publicly stating that when consumers should seek advice the most, they don’t think they will, interesting!

    So my question has to be if human nature is to seek help, to pass the problem on to another, why would the consumer NOT seek advice if the economic environment becomes difficult?

    How much did this report cost? May I suggest the money would have been better spent chasing fraudsters and educating the consumer.

  4. There does seem to be a obvious trend regarding our failing or failed regulator…

    All to often we are seeing our “CLIENTS” money wasted on exercises to point out the blooming obvious (like this one), excessive wages, expenses and bonuses, and pure vanity, like new logos, offices and PR

    I believe it forgets and has lost sight of what it actually is, and all the well scripted mission statements and public speeches will not paper over the very visible cracks……

    The very good thing about this now, is the consumer is/are realizing that its their money that feeds this monster and know, bad and failed regulation is largely responsible for why advice is expensive, why levies have taken presidence and not the rare.

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