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Financial Advice and Guidance: Consumer Market
09 January 2024
Lead MP
Harriett Baldwin
West Worcestershire
Con
Responding Minister
Bim Afolami
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Word Count: 3399
Other Contributors: 2
At a Glance
Harriett Baldwin raised concerns about financial advice and guidance: consumer market in Westminster Hall. A government minister responded.
Key Requests to Government:
The speaker urges the government to urgently address solutions for the unadvised through proposals like clarifying the boundary between guidance and advice, allowing firms greater certainty in supporting consumers without personal recommendations, enabling targeted support based on limited consumer information, and facilitating simplified advice at commercially viable prices. She also calls for increased awareness of services such as Pension Wise.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The speaker is concerned about the advice gap in financial services, where only a small percentage of constituents can afford professional financial advice. She uses an analogy of a supermarket to illustrate how this disparity affects consumer access and quality of financial guidance, noting that only the richest 8% benefit from expert help while the rest are left with generic or poor advice, potentially leading to long-term negative consequences for their savings health in retirement.
Gregory Campbell
DUP
East Londonderry
He congratulates the hon. Member on the timely debate and highlights the importance of providing professional, impartial consumer advice to help people make effective financial choices.
Jim Shannon
DUP
Strangford
He congratulates the hon. Lady on bringing the debate forward and supporting her view that individuals and businesses should have access to high-quality financial advice, particularly smaller businesses looking to start up locally.
Government Response
Bim Afolami
Government Response
Acknowledged Harriett Baldwin's support for the proposals, emphasised the importance of financial literacy, particularly among younger people. Described progress made in improving financial guidance and advice services through initiatives like the Money and Pensions Service and the FCA's role in regulating the market. Highlighted three initial policy proposals: allowing regulated firms to move closer to providing advice without legal changes, suggesting products or courses of action tailored to customers based on limited data points, and introducing a simplified advice regime for low-cost financial advice. Mentioned examples such as warning pension providers about inadequate retirement incomes and offering personalised investment advice for those inheriting small sums. Stated the need for secondary legislation for certain aspects but committed to moving forward quickly with further stakeholder input.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.