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PFS proposes voucher system for free sessions with advisers

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The Personal Finance Society wants every working adult in the UK to be given a voucher for a financial “health check” session with an adviser, the cost of which could be partially deducted from their next FCA levy.

The PFS says the “qualified guidance” session could either be face-to-face or over the telephone and would result in a summary of options that might include full financial advice.

The organisation has today written to ministers including economic secretary to the Treasury Simon Kirby and Secretary of State for Work and Pensions Damian Green with its response to the Government’s public financial guidance consultation.

It suggests that the proposed single guidance body could help with branding, facilitating and overseeing the initiative alongside government departments, while the PFS could direct consumers to participating advisers in their area through a subset of its “yourmoney directory.

The PFS says participating advisers could deduct a proportion of the cost of each session from their next FCA levy, based on a rate per redeemed voucher submitted.

PFS chief executive Keith Richards says the initiative would help bridge the advice gap.

Richards says: “A Government voucher scheme would give many who have never thought of professional advice a first-hand experience of its value and would demonstrate a real commitment by the new guidance body to collaborate with the personal finance profession to achieve workable outcomes in the public interest.”

He adds: “Many advisers are already delivering introductory financial advice sessions to consumers at their own expense and a voucher to cover the cost of a qualified guidance session would increase access and protect the interests of more consumers against poor planning and scams.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. A voucher scheme is an excellent and well overdue idea, which has been mooted several times. It will doubtless save the Government a very significant amount of money as they will not need to waste money and resources on all these very expensive quangos – and proper advice and guidance can be provided by properly trained and qualified IFAs.

    But as ever the devil is in the detail. What this report omits are the following points.(I’m sure there are many more).
    1. Will the scheme be restricted to IFAs – as it should be?
    2. What does partially deducted mean? If the whole coupon isn’t credited what is the point? Ideally the voucher should be for a stated and precise amount. Not a figure left in the air.
    3. What assurances are there that the FCA won’t inflate their levy to compensate.
    4. If the advice is on the phone, presumably the voucher will have to be sent to the adviser in advance.
    5. What proof is needed that the enquirer actually received worthwhile advice and that the time spent on giving it was concomitant with the value of the voucher?

  2. Further consideration also has to be taken as to if the voucher is for a service or for a monetary amount. For example, are we saying take this voucher for £750 and receive a review? If would the government not be putting a price on our service?

  3. ? great idea !!!

    Collect these vouchers (like green shield stamps) and get your levy reduced to nil or even be owed money

    What a nonsense……..

    Or worse still, waste our valuable time with tyre kickers, I have said many times before no-one values free anything.

    The problem of the advice gap (whether you believe there is one or not) has to be dealt with at the root of the problem not via gimmicks, crikey you will be wanting us to give away free cuddly toys and pens with every appointment……. talk about devaluing ourselves !

  4. This probably could do with a quick rethink.

    There’s around 30 million adults currently employed/working in the UK.
    Last year, FCA’s annual funding requirement (for their fees) was circa £482m
    If the voucher was worth more than £20 to the adviser, this would wipe out the whole AFR for FCA.

    To look at it another way, c813,000 are born in the UK each year. The Government once committed to give each of these children £250 at both and £250 later on in their youth. This annual commitment of £406m (plus administration) was regarded as far too expensive when austerity kicked in.

    Is it really being suggested that FCA (which is funded by us) is going to run a ‘voucher’ scheme that would be thirty times bigger?
    More so, how much would advisers reasonably expect to have ‘knocked off’ of their bill for their time and service, when twenty quid would wipe out the whole of FCA’s funding for a year?

    I can’t see how this could be run without advisers effectively giving up their time/services pretty much for free, which is noble and to be commended, but with thirty million customers to get through, might not be the most sustainable of business models.

  5. I hate to make this simple point. If the value of the voucher scheme was to be funded by deducting it from the FCA levy, who is actually going to pay, given that sure as good made little apples, it won’t be the FCA.

    Given that the FCA is funded by levies on us, would we then see our levy increased massively to fund it? If so, we’d effectively be paying for us to give advice.. i.e a zero sum game as far as advisers are concerned.

    As such I am “sceptical”….

  6. My concern is that IFAs are being expected to fill the ” advice gap”, which was not of our making, and I cannot see how a voucher system will provide access to full advice.

    Too much politics involved here, just like the interference with pensions legislation to encourage pension freedoms and raise tax revenues. It all falls back on advisers to facilitate these arrangements, take professional risk and not get paid very much for the work. If I offer my services for free I do exactly that, others must pay me for advice, and if they cannot afford it, I am not a charity.

    I am a fully paid up member of the PFS and applaud many of their initiatives, however, I am sure that most of us are not that desperate for new clients that we have to drag the bottom of the pool. Many advisers already offer pro bono consultations, it seems to be leading to an expectation that everyone is expected to do their bit, a very noble gesture but for many not economically viable.

  7. Blue Eyed Monster 22nd February 2017 at 5:53 pm

    Many of the potential problems already noted above, also if its for every working person in the country do my clients receive one? If so how do they redeem it if as PFS say its for guidance only, not advice?

    Also lets aim it at those most in need say people earning under £35,000 p.a

    Also let the govt issue the vouchers to be redeemed against our income tax, not our levies.

  8. Already proposed and studiously ignored. Maybe the PFS will have more success, though I won’t hold my breath.

  9. Harry Katz, why should the scheme be restricted to IFA’s? I have worked at several small IFA firms and now work at a private bank. The quality of advice, processes and expertise here is far superior to that of any of the IFA firms I have worked at?

    …not that we’d want to get involved in anything like this!

  10. For the majority of IFA’s, the 1st appt is free anyway. If a Client hasn’t got more than say £50k in assets above their ’emergency fund’, and with the intention to regularly contribute to their ISA/Pension, then they shouldn’t be looking for ‘professional financial advice’. They should probably find the best cash savings vehicle and invest their until they have enough monies to ensure that they have ‘capacity for loss’. This is not investment advice, cannot be construed as financial advice, is not tax advice, is not legal advice and nobody should invest on the back of these statements. Your fund value may go down as well as up and cash savinmgs are subject to inflation risk. Hurricane / storm Doris is not my fault.

  11. The elephant in the room is the ‘advice gap’. As I have maintained for years (ever since the phrase was coined) there actually isn’t one.

    Those in this perceived gap are ether ‘tyre kickers’ as mentioned above, not interested or (again as mentioned above) have salaries around £35k and are most likely in debt anyway. What is the point of flogging them expensive financial products when they already have the impost of Auto Enrolment and have debts which they would be better advised to reduce or redeem? Even if they were strong armed into buying something – what would the retention rate look like? Will they pay the fees?

    This whole topic appears to be an industry and Government inspired mis-selling debacle in the making.

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