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ABI sets out measures to help customers make better financial decisions

The Association of British Insurers has set out ways to make paid advice more affordable and attractive, and expand the information available for customers who do not want to pay for advice. The proposals are part of a package of measures to help consumers make better-informed decisions about their finances to ensure they can be more financially secure, which form part of the ABI’s response to the Financial Advice Market Review.

Improving access to financial advice and information could benefit consumers who currently underestimate the financial impact of ill health and injury, and those who do not appreciate how long they need their pension pot to last or the potential need for long term care.

The ABI has proposed the following key solutions to ensure customers make informed and confident decisions to become more financially secure:

1. Make advice easier to access:

  • Pension Wise sessions should include the option of an assessment of customers’ needs (a so called Fact Find), that they can then take to an adviser, reducing the cost of this paid-for advice.
  • The definitions used to describe advice should be simplified and standardised to help customers understand the terms.

2. Make advice easier to provide:

  • A portal for virtual complaints handling (a ‘complaints sandbox’) should be developed for sales happening now, so that providers and consumers can understand what good looks like.
  • The FCA through Project Innovate should support and ensure consistent standards of development for ‘robo-advice’ solutions, which some providers have already launched.

3. Improve access to information:

  • The boundary between regulated advice and information should be reviewed and clarified to enable providers to provide more information to customers and support them through financial decisions, particularly for those unable or unwilling or to pay for advice.
  • The development of a Pensions Dashboard should be driven forward to help encourage customer engagement and understanding of pension entitlement, with backing from industry, regulators and Government.

4. Enhance guidance

  • Pension Wise and The Pensions Advisory Service should be integrated, with signposting to guidance starting at age 50.

James Bridge, Assistant Director for Conduct Regulation said:

James Bridge"Consumers who are supported to make informed choices, are more likely to end up in a stronger financial position and make better choices to safeguard their finances. There is evidence that some customers are currently unable to access the advice they want or need.

"This review provides a significant opportunity to ensure that customers can make the best financial decisions to suit their circumstances. The range of solutions we have proposed aim to make advice easier and cheaper to access, and improve the quality of, and access to financial information."

Last updated 01/07/2016