28 March 2012
It is not just on the London Underground where consumers need to "mind the gap". Many consumers of financial services face just as critical a gap when they look for advice about their financial needs. Independent research published today by the Financial Services Consumer Panel into the advice market provides much needed clarity around what is meant by the "advice gap" and where the risks lie.
The research is based on in-depth discussions with a range of key stakeholders and includes an analysis of various models for delivering advice, some of which are already operating in the market. It also notes the constraints on development of other new models of advice imposed by the regulatory framework and the consequent lack of current growth potential in the overall provision of financial advice, guidance and help for consumers.
While it is difficult to quantify the size of the gap, many consumers are clearly unable to find suitable advice at an affordable cost, a position which is likely to remain unchanged for the foreseeable future. Industry, government and regulators must therefore work together to find a practical solution.
Adam Phillips Consumer Panel Chair commented:
"We hope that this research will play an important role in revitalising the debate about where consumer needs are currently not being met and what can be done to ensure that they have access to the advice and financial products they need. Various initiatives, such as the work of HM Treasury on simple financial products, are underway but there has to be a cohesive and imaginative approach involving industry, government, regulators and consumers if we are to find a way forward.
Other retail sectors are much better about identifying their customer needs and providing cost-effective solutions. We would like to see key stakeholders in financial services working together more effectively to fill the advice gap."
Notes to editors
1. The Consumer Panel's research is available at: http://www.fs-cp.org.uk/publications/pdf/advice-gap.pdf [1]
2. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
3. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website.
4. Panel members are appointed to serve a maximum of two terms of three years.