ABI calls for financial advice and guidance overhaul

72% of people do not want to pay for financial advice, according to a poll conducted by Yonder for the ABI

The Association of British Insurers (ABI) is calling for financial advice and guidance overhaul after a survey revealed that nearly three-quarters of people will not pay for advice.

The ABI believes changes are needed to shift the advice and guidance boundary and to enable customers to get advice that it is simpler and more affordable.

A poll of more than 2,300 people conducted by Yonder for the ABI found that 72% of people do not want to pay for financial advice. It revealed that four times as many people wanted one-off financial advice (46%) instead of the traditional model of ongoing fees (12%).

The research also shows that consumers have mixed views on how they want to receive financial guidance, suggesting there needs to be a range of options available to suit individual needs.

The most popular option for accessing information was through a government website (29%) followed by a pension provider (25%), family (23%), online information (22%) and Pension Wise (21%).

The ABI said the Financial Conduct Authority's (FCA) work on the Financial Advice Market Review and consumer investments market provide an opportunity for "reform and to enable advice that is simpler, more accessible and fit for the future".

It said reforming advice and guidance will enable providers, trustees and the Money and Pension Service to help customers more effectively when choosing what they want to do with their pension.

This will be vital for consumers in the current era of low interest rates and increasing reliance on defined contribution schemes for retirement, it said.

Keith Churchouse, director at Chapters Financial, said the FCA needs to look at the increase in regulatory costs and suggested it may be time to bring back commission.

While auto-enrolment and pension investment have been very successful over the past seven years, the ABI survey indicates that the Retail Distribution Review was a failure, he said.