Significant milestone – Financial Services and Markets Bill debate
Full steam ahead on a new personalised guidance regime. Clear demonstration of support right across the house. The Bill amendment called for by Harriett Baldwin is not necessary. Government is able to move on this issue without the need for a change to the legislation.
Chris Hill, CEO, Hargreaves Lansdown said: “Yesterday marked a significant milestone in the campaign for a regulatory regime for personalised guidance. Following a debate in the House of Commons there has been a clear demonstration of political support for this regime from right across the House. This steer, as well as the strong support from the Minister – makes it clear to the FCA and HM Treasury officials that they need to advance this proposal before the next election (which needs to take place by the end of 2024).”
The debate took place because the Chair of the Treasury Select Committee Harriett Baldwin tabled an amendment to the Financial Services and Markets Bill, calling on the Government to introduce such a regime.
Harriett was the Conservative Economic Secretary to the Treasury in 2015-2016 and conducted the Financial Advice Market Review. In the debate the current Economic Secretary to the Treasury, Andrew Griffith, noted that she was not able to do more on this issue at the time because of EU rules.
The Minister said that the amendment itself was not necessary as the Government is able to move on this issue without the need for a change to the legislation in the Bill. He underlined the need to address the advice gap – noting that it “cannot be right that only the wealthiest can access financial advice.” He thanked the efforts of TISA and others in promoting reform and declared that it would be “something that I will take forward”.
Under urging from Harriett to do this “with great urgency,” the Minister declared that “we will pursue it with great urgency.”
Harriett used her speech to welcome the support from the Labour Party front bench for her amendment. She spoke to the potential to nudge more people into investment which would “unleash growth and investment.” She commented that only 8% are able to access financial advice and that the Government should use the new flexibilities from being outside of the EU to conduct a personalised guidance review with great urgency.
In the debate, the Labour Chair of the Work and Pensions Select Committee Stephen Timms supported the amendment in the debate, as did former Shadow Chancellor John McDonnell. Conservative MP and member of the Treasury Select Committee Anthony Browne described the situation as “an absolute scandal that a huge swath of the population can’t get access to financial advice and are impoverished as a result because of a failure of regulation, or excessive regulation”. He said that he was encouraged that the Minister would pursue this matter with urgency and he would hold him to account for that.
These sentiments were supported a further Conservative member of the Treasury Select Committee John Baron. “A lot of people of modest means have no access to good advice.” He was concerned that they might leave cash in the bank when inflation is eroding its value. He supported a middle ground between guidance and advice to this end. He asked that the Minister should get the Treasury looking at this concluding that “we must stop regulation being the enemy of the good.”
Chris Hill: “The political support is clear and we will continue to work with HM Treasury and FCA officials to shape this new regime.”