HM Treasury and the FCA have co-published a baseline report concerning the Financial Advice Market Review (FAMR).
The FAMR report was published in March 2016 and set out a series of recommendations aimed at stimulating the development of a market that provides more affordable and accessible financial advice. One of the recommendations was that the FCA and HM Treasury should work together over the first 12 months after the publication of the report to develop an appropriate baseline and indicators to monitor the development of the financial advice market. These would then be tracked on an annual basis and published on the FCA’s website.
The baseline report that HM Treasury and the FCA have co-published identify a range of indicators which have been designed to give them a snapshot of the market for financial advice and establish a baseline, allowing them to monitor developments and assess at a high level the impact of the FAMR recommendations, when conducting a review of the outcomes of FAMR, planned for 2019. The indicators include measures of consumers’ use of advice and guidance (the ‘demand’ side) and measures relating to the provision of these services (the ‘supply’ side).
On the demand side, the indicators include:
- numbers of consumers using advice and guidance and different channels used;
- use of workplace advice and guidance;
- reported reasons for not taking advice;
- consumers’ willingness to pay for advice;
- consumer levels of engagement; and
- levels of satisfaction with advice and complaints data.
On the supply side, the indicators include:
- number of advice firms and advisers;
- number of independent/restricted firms;
- minimum investment/pension pot size advised on;
- adviser charges;
- industry views on the clarity of the regulatory framework; and
- the extent to which firms are offering different types of services e.g. automated advice.
The report is also supported by two pieces of consumer research:
- Financial Advice and Guidance: Qualitative research to inform the FAMR baseline; and
- Financial Advice and Guidance: Quantitative research to inform the FAMR baseline.
View Financial Advice Market Review (FAMR) baseline report, 30 June 2017