FAMR has made limited progress, notably the introduction of a £500 pension advice allowance and increasing the tax-exemption for employer-funded advice from £150 to £500
Lack of clear, measurable targets and deadlines means project risks drifting
FAMR should be expanded to cover all disclosures to customers, including “impenetrable” Key Features Illustrations, with the aim of simplifying
Tom Selby, senior analyst at AJ Bell, comments:
“Given the fanfare that accompanied the Financial Advice Market Review, it’s hard to not feel a little deflated at just how little has actually happened.
“The new £500 pension advice allowance and increase in the tax exemption for employer-funded advice from £150 to £500 are useful, but this is tinkering at the edges rather than the radical reform promised at the outset.
“Indeed, many of the FAMR recommendations are simply about clarifying existing rules or providing guidance and ‘rules of thumb’. While these moves are of course welcome, we must not kid ourselves that this represents the onset of an advice revolution.
“The FAMR would benefit from some clear targets and deadlines so success can more easily be measured. Without this clarity of mission, the project risks drifting along and a huge opportunity to improve the advice market for savers will be lost.
“We are disappointed the FAMR continues to take a narrow view of disclosure to customers. While reviewing suitability reports is a good start, this should be accompanied by a review of the rules covering all information sent to savers – including Key Features Illustrations - with the aim of simplifying the information provided to customers. Few would argue a KFI running past 10 pages containing reams of impenetrable numbers helps savers making retirement income decisions.”