The trade association has published 12 recommendations in its ‘Future of Advice’ policy paper, which it believes will improve the market.
The recommendations include a review of the definition of advice, a review of the regulatory perimeter, and the approval of financial promotions to become a regulated activity.
In addition, the paper recommends an improved online consumer protection from financial scams through the Online Safety Bill, effective implementation of the financial capability strategy, promotion of the value of advice and the financial advice sector, effective signposting to advisory services, the creation of new lower cost services to provide effective financial advice to a wider market, and provision of a regulatory framework to support such a simplified advice service.
Lastly, it calls for a review of the handbook to ensure a clearer, more effective, proportionate and cost-efficient regulatory environment, a review of and improvements to the Financial Conduct Authority (FCA) supervisory regime, and promotion of high standards of behaviour and competence across the sector to increase professionalism.
According to research conducted by PIMFA, 90% of consumers have never taken paid for financial advice and 79% of those who had not taken advice had no intention of doing so in the future.
It noted that some of this is down to a lack of awareness of the benefits or need for advice, with 62% of consumers believing they did not need help managing their money.
PIMFA also called for regulation of financial promotions as well as improvements to the supervisory regime.
Among PIMFA’s immediate priorities this year will be to lobby government and to work with stakeholders across the industry, consumer groups and the regulator to ensure that economic harms are included in the upcoming Online Safety Bill to provide greater protection to consumers from financial scams.
Liz Field, chief executive of PIMFA, said: “There is now more than ever, an increased need for financial and investment advice and support, but most people still don’t engage with financial advice, seeing it as an expensive service for the well-off.
“PIMFA believes that access to advice should be an affordable option for everyone in the UK. Advice plays a pivotal role in a well-functioning financial services landscape, providing individuals with the support they need to navigate their financial journeys, as well as providing access to products and markets they would not be exposed to otherwise.
“PIMFA is committed to broadening consumer access and to creating the best environment for the financial advice and wealth management profession to deliver their services and meet their clients’ needs. “We recognise that none of the recommendations we put forward today can be implemented overnight.
“But if we are to create an industry fit for the future that ensures professional advice for all, it is vital the industry, regulators and government work together.”
