UK regulator admits adequacy of advice still a concern
By Cristian Angeloni, 10 Jan 19
Number of people investing up but risk of ‘poor value’ services still high
Click through the slides below to see the key concerns flagged up by the Financial Conduct Authority.
The Financial Conduct Authority (FCA) has published its yearly overview of the financial sector and, while overall investment and assets under management have been growing steadily, there are still several areas troubling the regulator.
The investment habits of different generations was a key concern.
“It’s unsurprising that the FCA is worried about the long-term savings of future generations and people’s expectations on how much they will have in retirement,” said Ian Browne, pension expert at Quilter.
“In fact, they paint a bleak picture across the generations: citing millennials who are struggling to get on the housing ladder and have slower pay progression, which knocks on to mean they aren’t saving for retirement; generation x who is stuck between a rock and a hard place, as they are funding both the generation above them and below them; and some of the baby boomers are arguably in the best situation, particularly those who have DB pensions and property wealth that has grown at unpresented levels.”
But, he added: “Even they are faced with growing life expectancy, meaning their money has stretch further than perhaps they anticipated.”
Another key concern was that the pace of regulatory change has left some firms struggling to keep up, which was another issue flagged up by the UK watchdog.
“In some areas, such as pension transfers, regulation has been changing so consistently that the industry is running just to stay in place,” continued Browne.
“It is vital that this area is appropriately regulated, but the deluge of changes seen over the past number need to embed first. Indeed, for the industry to consider potential solutions to some of the new societal challenges facing generations they first need to be confident that the rules they are structuring those solutions around will not change.”
Click through the slides above to read about the issues highlighted by the UK regulator Sector Views report for 2017/18.