The FCA have called for input on their Financial Advice Market Review

Its big idea hinges on this statement

the advice gap should be regarded as any situation where consumers cannot get the form of advice that they want on a need they have, at a price they are prepared to pay.

Which deals with half of the problem

The other half of the problem is that nearly 2m critical decisions will not be made by consumers but for consumers. They are made by people trusted to take those decisions- trustees – or in the wider sense fiduciaries.

My fundamental issue with the FCA’s FAMR is also an issue with the FCA, it does not consider that it can or should regulate these fiduciaries – presumably because they don not have an advice gap.

But this is patently not the case. As the OFT stated of employers (charged with setting up pensions)-

How can we suppose that employers, who are no more wise about buying pensions than their staff, are expert buyers?

If they cannot buy on their own, what makes us think that the 95% of the 1.8 employers yet to buy workplace pensions, are any better placed to get advice than the silent majority of consumers that the FCA worries about?

I fear that the answer is political. This is not the FCA’s problem, it is tPR’s. It is not the Treasury’s problem , it is the DWP’s. This is not a problem that need concern the FAMR because it is sponsored by the Chief Economic Secretary to the Treasury and the FAMR secretariat is comprised of senior officers of the FCA.

So we are not really looking at matters from the consumer’s point of view, we are looking at it from the FCA’s point of view, and since the consumer- so ill protected on pensions – is having nothing looked at , that might improve the quality of his or her workplace pension, I am minded to ignore this document.

And I’ll say at this point that if the FCA want input from practitioners rather than policy wonks. At nearly 50 dense pages and with 41 questions, this is not a paper that a practitioner can readily be asked to digest and provide input to, without laying down his advisory tools for a couple of days.

If there was an advice gap, it is about to get a whole lot wider if all advisors do as they are bid.

But back to the premise that an advice gap exists where there is not money to pay for advice and advice is needed.

I’d run with that.

That’s the situation that 95% of the 1.8m employers who don’t have a workplace pension in place.

And nobody – not Government or Regulator or advisor or employer, seems to be particularly worried whether the investments made on behalf of the consumers, work well or badly, whether the pensions provide retirement freedom or not, whether there is any attempt on behalf of the provider to engage or educate the consumer as to what she or he is doing.

Why not?

Can I ask that question please? – And can you point me somewhere in the rectum of Government I can stick it ?