More than two-thirds (68%) of advisers say costs of providing advice outweigh the returns while 52% warn that regulatory barriers and risk of providing advice are the main reasons preventing them helping mass market savers.
One in three savers believe the cost of advice is too high and that 31% believe they do not need advice. This applies to older and younger savers with 50% of over-65s believing they do not need advice and 28% of those aged 18 to 24 saying they do not know how to access advice.
Reforms of the FSCS levy for advisers and streamlining the Financial Ombudsman Service would help reduce costs for advisers, MetLife believes, and it recommends reasonable and proportionate time-limits on FOS claims against advisers from consumers.
MetLife recommends that pensions and how to access financial advice should be included in schools’ financial curriculum. It also suggests that allowing financial advice to be offered by employers as an optional workplace benefit would encourage take-up.
Dominic Grinstead, Managing Director, MetLife UK, said:
“It is clear that the current environment is not serving the best interests of the less well-off. The lighter touch model would be equally robust in terms of ensuring that the best possible outcomes are achieved for customers, but crucially it would be designed to be appropriate for the needs that the mass market are more likely to face.
“Consumers have varying needs and for those with less sophisticated investment needs, a simpler advice model may be more appropriate. This in turn, would benefit from a proportional, lighter touch regulatory framework, which would reduce costs and make advice more easily accessible. Digital technology also has a role to play together with other channels to market, ensuring that consumers have a choice of how advice is delivered to them”.
