Commons Sense

House of Commons · Westminster Hall

Financial Advice and Guidance: Consumer Market

09 January 2024 · 2 other contributors · 3,399 words

Opened by Harriett Baldwin Con West Worcestershire

Responding minister: Bim Afolami

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Harriett Baldwin raised concerns about financial advice and guidance: consumer market in Westminster Hall. A government minister responded.

Key points

  • Speaker is concerned about the advice gap in financial services, where only the richest 8% receive professional financial advice.
  • Speaker urges the government to clarify the boundary between financial guidance and advice to support consumers more effectively.
  • Minister acknowledges progress in financial guidance through initiatives like the Money and Pensions Service and FCA regulation.

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.

Opened the debate

Harriett Baldwin Con West Worcestershire

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.

Other contributors (2)
  • 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

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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