FCA: access to advice remains a mainstream issue

"The major technological and social forces transforming financial markets mean that access problems do not only affect vulnerable consumers."

The regulator believes that new access issues have emerged in recent years, often unexpectedly, because of social and technological change.

The FCA stated: "The major technological and social forces transforming financial markets mean that access problems do not only affect vulnerable consumers. As this Occasional Paper shows, it is a mainstream issue which cuts across a number of the FCA’s business plan priorities for 2016/17, in particular Innovation and Technology; Financial Crime and Anti-Money Laundering; and Treatment of existing customers."

Other key problems included customers who have slightly unusual needs challenging systems that are seemingly designed for ‘average customers’, meaning that customers are unable to find tailored products for their needs at a price they can afford.

The FCA also admitted that measures put in place to protect consumers from fraud can make access "impossible".

The research was also critical of 'confusing jargon and terminology' which make products difficult to compare, alongsider offers and introductory rates that can mask the ‘true’ costs of products.

However a large bulk of the research focused on technological changes, highlighting that digital innovation can leave behind those who live in rural areas or lack digital skills, and that automated processes deny financial products to many consumers.

The regulator believes that increasing numbers will "find themselves in a financial services ‘void’, as firms continue to move more of their services online and reduce the options for speaking to a member of staff face-to-face".

The FCA said: "Resolving this is complex. Ensuring that consumers who would be turned away in the normal course of business have access to services can create other challenges, such as requiring cross-subsidy from public funding or other customers. So interventions must be considered carefully."

James Bridge, ABI Assistant Director of Conduct Regulation, commented: “The paper raises some important questions on how financial services products can be made as widely available as possible. Insurers have made significant steps to make insurance more accessible, including funding Flood Re, embracing digital technologies, and publishing data to help customer understanding.

“The UK is one of the world’s most competitive retail insurance markets, underpinned by effective risk-based pricing, which supports a thriving specialist market to meet society’s needs.”