The Government must take stronger action to deal with the UK’s savings crisis, says Sesame chief executive Ivan Martin.
At a Money Marketing RDR round table, Martin said that tinkering with the adv-ice process is pointless and called on the Government to take responsibility for addressing the savings gap in the UK.
He said: “Whether you have one or two tiers of advice is irrelevant, it is a much bigger issue.
“People keep talking about the Australian model. That is all about compulsion. People quote wraps and the success of wraps in Australia. The majority of products that are on Australian wraps are pension-related, not investment-related. The charging structures are very different from how they are over here. But it starts with the Government saying: ‘That is what you have to do.'”
He said the UK’s credit and savings crisis stems from the fact that it is too easy to obtain credit and the Government needs to incentivise savings, not borrowing.
Martin said: “Ultimately, it will go pop in this country. You cannot keep borrowing at the rate that we are borrowing – somebody has to pay for it all.
“It is much better to give incentives for people to save, rather than incentives for people to borrow.
“I do not have all the answers to these problems but to me it is disproportionate what is going on right now as far as the retail distribution review is concerned, against some of those bigger issues.”