Mis-sold Investment Specialists - Call For a Free Expert Claims Assessment
0808 163 1659

Back to blog overview

What is the Financial Advice Market Review?

Published on:

The Financial Advice Market Review is a recent initiative organised by the government and the FCA to investigate financial advice given to customers across the UK.

Its main aim is to ensure firms are offering suitable advice to their clients, and to assess whether or not current regulations and legislations restrict financial institutions from offering services to less well-off clients.

Why is it needed?

According to an ONS report released in 2012, the top 10% of households in the UK are 850 times as wealthy as those at the bottom. They have an average of £1.2million tied up in cash, property and pensions, whereas those in the less wealthy bracket have just £4,400.

It’s little wonder that many people consider investing to be the sole preserve of the rich and successful. The Financial Advice Market Review seeks to redress the balance and make investing a more viable option for everyone, regardless of social or economic background.

What will it accomplish?

According to Harriett Baldwin, economic secretary to the Treasury, the review is focused on supporting ‘working people at every stage of their lives’ and making sure ‘consumers can access high quality and affordable advice so they can make informed decisions with their hard-earned money.’

The Financial Advice Market Review seeks to:

  • Enable all UK consumers, regardless of income, to make effective decisions regarding their finances.
  • Encourage the investment market to broaden, offering financial advice to all consumers.
  • Create an environment that enables financial institutions to offer competitive advice services, whilst adhering to these regulatory guidelines.
  • Make sure all companies offering financial advice adhere to the outlined principles.
  • Examine whether or not current regulatory guidelines should be revised.
  • Explore the option of introducing a ‘safe harbour’ to limit the liabilities of advisers.
  • Determine whether or not certain regulations and rules impact on the affordability and general availability of certain financial products and advice.

Who benefits – the clients or the firms?

Actually, it benefits both. The customer is able to have access to better advice which is more suited to their current financial situation. The bank or financial company is burdened with less liability should an investment product underperform.

Chris Hannant, Director General for the Association of Professional Financial Advisers, states: “We welcome government recognition of the need to examine the legislative barriers to accessing affordable financial advice. We believe there needs to be a fundamental rethink of the current regulatory environment, particularly around liability.”

He also added: “Consumers need to understand that investments can never be 100% risk-free.”

How will it impact on claims for investment mis-selling?

One major concern is that this will adversely impact on people’s ability to seek compensation if they’ve been mis-sold an investment product.

However, the review certainly does not seek to prevent people from seeking compensation where due. Instead it will be reviewing the assignment of liability, which currently often penalises innocent financial institutions for the poor conduct of others.

The hope is that the need to seek compensation will naturally diminish with the focus firmly placed on providing good financial advice in the first place.

References:

  1. http://www.theguardian.com/money/2012/dec/03/richest-10-uk-households-40-per-cent-wealth-ons
  2. http://citywire.co.uk/new-model-adviser/news/govt-eyes-radical-advice-reforms-to-improve-access-for-less-wealthy/a830458
  3. http://www.professionaladviser.com/professional-adviser/news/2420293/govt-and-fca-launch-major-review-of-financial-advice-market

Request a call back

If you'd like us to call, please fill in your details

Why choose us?

  • Hassle-free process.
  • No lengthy paperwork to complete.
  • No upfront fees. *
  • Your own dedicated claims expert.
  • Claims settled within 6 weeks on average. **
  • Over £80 million reclaimed for clients. ***
More About Us

Speak to our friendly experts

If you feel you've been let down by your bank or financial adviser please call us.

Call today 0808 163 1659

Customer Stories

We've helped thousands of people win compensation as a result of unsuitable financial advice.

William Thornley I’m absolutely delighted with the service we got from Goodwin Barrett, I couldn’t believe how easy it was and i’ve nothing but praise for them
Alan Parton This was an excellent result which my wife and I never expected. My sincere thanks to you for such an excellent achievement, I cannot thank you enough
Stuart Snowden After sending a report to Santander, they agreed with our findings and awarded Mr Snowden an amount of £7,000 made up from a refund of the losses together with interest and compensation.
William Miller This was a fantastic result I never expected. My sincere thanks for such a prompt and efficient service.
Margaret Long I am so grateful to your company but especially to Steve Wise for getting me the money back
Janet Rynkiewicz We reported our findings to Halifax and within a matter of weeks had secured our client the sum of £26,700 in compensation.
Fred Hardman After we sent a detailed complaint to Halifax, Fred was delighted to receive £6,916 from the bank in a matter of weeks.
Stephen Montague Having investigated the complaint Lloyds TSB agreed that the advice was unsuitable and agreed to pay the clients £10,700.