In response to the Financial Services Authority's (FSA), the industry regulator, consultation paper on reforming how and where financial services advice is obtained, the Financial Services Consumer Panel has suggested that a new service is established to provide generic advice for the lower and middle income classes.
The panel have suggested that a centrally funded service could be provided where people who cannot necessarily afford formal, professional, advice be made available to give generic solutions where people may be seeking lower value debt, protection, savings, investment and retirement guidance.
They have called on both the industry and the government to fund the service.
Our view
This type of service is something that we suggested in a response to a previous consultation paper and in discussions with the Treasury. In our opinion, some form of "Financial Advice Aid", operating in a similar way to legal aid from the Legal Services Commission.
However, if funding is to be made by the industry and government then they must ensure that the advice or guidance service is independent. This should not be set up as a virtual monopoly for Bank Assurers or Insurers.