Aegon UK chief executive Otto Thoresen says the industry must engage in the generic advice review or suffer a further hit to its reputation and loss of future business.
Speaking at the ABI’s annual conference in London, Thoresen, who was appointed to head the Government’s financial capability review in January, said he was working on the basis that the review would cost at least 50m a year.
He said the industry should not view this as a purely altruistic investment and more financially aware savers would create more reliable creditors and persistent savers. He said the review will be based on two models. At one end, there will be a “centralised, monolithic” approach with a new organisation performing all generic advice functions. At the opposite end will be a fully decentralised and diversified model based on a small central body with an advisory, strategic and accreditation function but with the actual advice delivered by external providers.
A hybrid model could consist of a new organisation providing strategic direction and delivering some aspects of the service but working in partnership with other organisations in Government, industry and the third sector.
Thoresen said designing a national approach to meet the needs of disenfranchised consumers is possible but managing the boundary with regulated advice will be a crucial part of the review. He said: “The industry has two choices – engage with the design and build or to disengage and have it built and directed without our input.”