Treasury eyes ISA season for financial advice scheme rollout
A flurry of fresh financial advice could be aimed at savers as soon as February as the Treasury seeks to fast-track the rollout of its flagship scheme to get more Brits investing in the stock market.
In a speech to the Investment Association last night, Economic Secretary to the Treasury Lucy Rigby confirmed the government is “working closely” with City regulators to roll out the scheme by ISA season, a weeks-long period in which savers rush to fill up their tax-free ISA allowance before the end of the tax year in early April.
The plans will enable authorised firms, including banks, to provide more support with decisions around investments and pensions by allowing them to make recommendations to groups of customers based on shared characteristics such as income level, rather than on an individual basis.
Labour has been increasingly vocal on its intention to shift people away from stockpiling cash to investing in stocks in a bid to boost economic growth, inject much-needed liquidity into London’s public markets and grow returns on savings.
Rigby said: “We need to unlock the potential of retail investment so more consumers enjoy higher returns, and put more money into their pockets.
“Targeted Support…represents the biggest reform of the financial advice and guidance landscape in more than a generation, and will be a step change in the support that consumers receive to invest.”
Slashing red tape
Rigby also reaffirmed the government’s intention to cut red tape preventing financial services from becoming more competitive in the global market and to promote greater risk taking.
As part of the reforms, the government wants to streamline the senior manager and certification regime, a set of rules which hold senior managers responsible for their actions and competence rather than their firm as a whole, through slashing the burden of the rules on firms by 50 per cent.
This includes proposals to remove the certification regime and reduce the number of senior management functions which require pre-approval from financial regulators.
Rigby also noted the government is working to reform the Financial Ombudsman service, ending its position as a “quasi-regulator”, due to the service overlapping with the Financial Conduct Authority (FCA), in order to “provide greater consistency and certainty for everyone”.
However, she stressed she was “not talking about a bonfire of regulation”.
She added: “The UK is known as a dependable and reliable international partner, and this reputation is built on our steadfast commitment to effective regulation.
“But regulation has to be tailored to the risks, and should enable risk taking where this is appropriate.”