Otto Thoresen, the chief executive of Edinburgh based, AEGON UK, has today published the final report of the Thoresen Review of Generic Financial Advice.
The report concludes that a national money guidance service should
be set up to provide the people of the UK with the knowledge,
understanding and confidence to make better decisions about money
issues.
This service should focus on giving people information and guidance on budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits, and jargon busting. It should stop short of recommending specific products, and it recommends that the service should offer a combination of telephone, Internet and face-to-face guidance.
The report adds that the most appropriate way of delivering a money guidance service is a partnership model, with a central body to direct the strategy, set standards and deliver some services, but with much of the service actually delivered by accredited partner organisations which could include those who already do a good job helping people with their money. It concludes that the Financial Services Authority (FSA) should take forward the national Money Guidance service project, and that such money guidance would need a new brand which encapsulates the principles of the service, most notably that the service is "on my side" and is "sales free".
The report calls on the Government to set up a regional pathfinder service as soon as it possible, to enable the report's recommendations about the service to be thoroughly developed and road-tested. This should last around two years and would cost around £10-12m.
Thoresen said: “I believe that good money sense needs to be as much part of people's lives in the twenty-first century as healthy eating and keeping fit. ‘Money Guidance’ will help people deal with the money matters that shape their everyday lives - budgeting their weekly or monthly spending, saving and borrowing, insuring and protecting themselves and their families, retirement planning, and understanding the technical language that we in the financial services industry too often use.
“People have told us that they want and would act on this guidance. In research we commissioned 75 per cent of people surveyed said they would use a "national information and guidance service for personal finance issues". Of these, over 25 per cent felt that they would be very likely to use this service. And evidence from our practical prototypes suggests that eight out of ten participants took at least one action within a week or so of using the service. Over half of these took specific action, such as buying a new product or speaking to a regulated adviser.
“My report sets out how a national money guidance service could transform people's lives as well as bringing substantial benefits to the industry and Government. Its recommendations to the Government set out a vision for how the service could be delivered.”
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