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14 March 2016

FCA: Final report on Financial Advice Market Review


This report presents a series of measures aimed at stimulating the development of a market that provides affordable and accessible financial advice and guidance for everyone, at all stages of their lives. It also contains proposals designed to increase consumer engagement with financial advice.

The Financial Advice Market Review was established with the aim of identifying ways to make the UK’s financial advice market work better for consumers. The Review had a wide scope, and looked across the entire financial services market in order to assess the availability of advice and guidance to help people with their financial decision-making, particularly those who do not have significant wealth or income.

FAMR did not look solely at advice in a formal regulatory sense. Instead it considered consumer needs and preferences for different types of help with their financial decision-making and the potential barriers to the provision of these services. As such, it considered a number of issues, including the regulatory and legal framework, the economics of providing advice, consumer engagement and the role of technology.

The market currently delivers high-quality solutions to those who can afford advice. However, not everyone wants or needs a personal recommendation in respect of every decision, nor do they always need a comprehensive assessment of all of their financial circumstances and requirements. It is clear, though, that people would often like more support in understanding the options that are available to them. More can be done to create an environment in which firms can deliver tailored services which give consumers advice on a more limited basis or the guidance to instil consumers with the confidence to make their own decisions.

It is crucial that consumers receiving financial advice have confidence in the regulatory system and have access to redress if they are wrongly advised. FAMR believes that the existence of appropriate protection for consumers is necessary if they are to have confidence in financial advice. However, it is also clear that the risk of paying redress in the future on advice given previously is a concern for many firms.

FAMR has sought to develop a better understanding of the role of firms’ liabilities for redress in the context of the advice gap. The recommendations of FAMR seek to balance the need to give financial advice providers confidence that if their advice is professional and suitable they will not be exposed to unquantifiable costs in the future, with the need to ensure that where consumers do suffer as a result of poor advice, they are able to access the appropriately high levels of consumer protection currently available.

Full report



© FCA - Financial Conduct Authority


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