We are seeing increasing activity, with more forward-thinking employers looking to provide financial planning for their employees, especially in light of the new pension freedoms and reduced allowances.
One option open to the Government is to encourage more employers to fund financial planning advice in the workplace. By exempting financial planning fees from being a taxable benefit in kind, this would make it a more attractive proposition and see a greater adoption of financial planning as a key employee benefit.
The financial advisory landscape could potentially radically change, not only for the benefit of consumers but also for the benefit of wealth management firms that are prepared to adapt and evolve their business model to take advantage of new opportunities.
The Government also needs to be cognisant of the fact that continued meddling with the financial advisory market has the potential to continue to unsettle the consumer and put them off seeking advice in the first place. Clearly, we need a period of stability and clear direction to begin to rebuild long-term trust between the profession and the consumer.
Keeping it simple
The review will focus on the advice gap for those with less complex financial requirements but who do not have significant wealth and/or the ability to pay for bespoke advice.
Robo-advice may well be one of the ways the wealth management industry can bridge the advice gap and open up new avenues of business. Another option is for consumers to have greater access to low-cost or free guidance from providers, with the profession able to provide bespoke advice when required.
