"Those in glass houses should not throw stones" "Those in glass houses should not throw stones"

03 May 2017 Ken Davy

Ms Hughes makes many key points in her article about the lack of value for money advisers have experienced from the FCA and its predecessors over the years, and I am therefore going to look through the other end of the telescope at the great value advisers provide to their clients.

The savings gap is one of the biggest ongoing issues in financial services. However, research from Unbiased in 2012 showed that there was almost a 90 per cent differential between the pension pots held by consumers who had an adviser and those who had not.  

Of course, pension pots are not the only issue, there is a serious lack of understanding from many consumers about the importance and benefits of financial planning in general. Indeed, Royal London’s State of the Protection Nation survey revealed that just 2 per cent of those without children and 8 per cent of those with children hold income protection cover, and for critical illness cover the numbers rise only slightly to 4 per cent and 11 per cent respectively. Every one of these families without protection is vulnerable to the loss of a breadwinner and could have been helped by an adviser. Unfortunately, the fact is that 10 years ago there were nearly 100,000 advisers compared to fewer than 25,000 today; and some 70 per cent of their clients were CI or below.

As everybody who has ever been, or worked with, an adviser knows, the value and benefits received by clients and their families surpasses anything that can be quantified solely in pounds and pence. I would suggest that the FCA takes into account the full picture before it questions the ‘value’ of the services advisers are providing. I would urge it to stick to its role of creating a strong framework for the financial services sector to do its job for consumers. To echo Ms Hughes' article, if it wants to look at costs, perhaps it should look first at its own budget. Secondly, it might also consider why it costs Pension Wise about £500 per appointment, just to deliver guidance.

Ken Davy is group chairman of SimplyBiz


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