"Three cheers for FAMR one year on"
Regulator released Financial Advice Market Review recommendations and updates on progress
Thanks to the Financial Conduct Authority (FCA), many had more to digest over Easter than chocolate eggs.
Three days before the holiday, FCA and the Treasury issued a raft of important papers delivering feedback and recommendations on Financial Advice Market Review (FAMR). Given their potential importance and with one major exception, the generally positive impact the proposals are likely to have on financial advisers, it is disappointing the timing means they have not had the media coverage they deserved.
I urge you to download the FAMR Progress Report from the Treasury website.
At 12 pages, it is readily digestible and provides comments and clear explanations of how each of the 28 recommendations progressed. For example, recommendation 20 was that the FCA should review the funding of the Financial Services Compensation Scheme (FSCS) to explore the merits, risks and practicalities, of alternative approaches.
The consultation period on the FSCS review is closed, and we wait with baited breath for the outcome later this year. We expect a positive outcome for financial advisers, however I am concerned that the FCA is going to consult further on some aspects, with a view to not making the final rules until 2018. Depending on the details of the areas this covers, I believe this work must be accelerated.
The key issue of the difference between “advice and guidance” is recommendation 17, where the Financial Advice Working Group, after considerable market testing, concluded the answer is a simple description for consumers of what guidance and advice mean, to be set side by side.
Looked at positively, this has the potential to be a massive step forward in regards to consumers’ understanding of the difference between guidance and advice.
Ken Davy is chairman of SimplyBiz