Money Marketing’s campaign, Pave the Way to Save, was set up under the premise that we desperately need to create a better savings culture in the UK.
As the Government consults on its restructure of financial services regulation and with the coalition still in listening mode, now is the perfect time to lobby for improvements to the regulatory structure.
But changing regulation alone will not bring about the cultural shift that is needed. The industry has to take a look at itself and examine what more can be done to increase consumer engagement and persuade people of the value of decent advice and the need to save for their future and protect themselves and their families.
The introduction of auto-enrolment, the examination of simplified products by the Government and the recently formed Consumer Financial Education Body are all also likely to be influential factors.
As the one area of financial services with its interests completely aligned with the consumer, the IFA community is best positioned to drive forward this debate, with the help of the wider industry and consumer groups.
The campaign began with a call for the new financial regulator, the Consumer Protection and Markets Authority, to have a statutory objective to increase savings and protection rates alongside a list of secondary objectives that fall under its primary aim of ensuring confidence in financial services and markets.
We believe that such a move would create a more balanced regulator and a shift in regulatory focus to ensure policymaking encourages rather than restricts access to decent saving and protection products.
FSA policies have been skewed far too much towards a narrow view of consumer protection, which has been focused on cracking down on misselling at all costs without enough consideration of the dangers to consumers of not saving enough or protecting themselves and their families.
Of course, the regulator must guard against unscrupulous individuals and firms but its lack of a mandate to address the savings and protection gap has led to a regulatory imbalance.
The campaign has already been discussed in Parliament and has won the support of IFAs, providers and consumer groups, although not yet Government ministers, despite being pressed on the matter at the Conservative Party conference.
The campaign will also be looking to facilitate debate about the broader role of Government in encouraging a better savings culture alongside other issues such as debt management. The Government has set up a behavioural insight unit within the Cabinet Office, drawing on the so-called nudge agenda promoted by prime minister David Cameron. We will be asking what more Government can do to cultivate a greater sense of personal financial responsibility.
We will also be looking at the role of advisers and providers and suggestions for better ways to engage with consumers to demonstrate the value of advice. For instance, too many advisers see technology as a threat to their business rather than an opportunity to expand their client offering.
We will be running a series of features and roundtables over the next few weeks and months to explore some of the barriers to saving and to look at how they can be addressed. To get involved with the debate email me at: email@example.com.