The PFS says it believes it has a potential solution that would deliver a “sustainable and fairer financial education and compensation” strategy and wants members to call on MPs to look at its proposals.
The PFS says its solution would give consumers the same level of compensation as now but instead of compensation being paid from a “patchwork of professional indemnity insurance and levies to the Financial Services Compensation Scheme”, it would be funded by the market with a levy on the £9 trillion of retail assets managed by the UK investment industry.
The society says it has calculated that its levy - which would pay existing compensation and fund consumer education through the Money and Pensions Service - would equal only approximately 0.006% of assets under management.
The professional body has produced a template letter for financial advisers to send to their local MP, which can be found: HERE
The template allows financial advisers to make reference to the Personal Finance Society’s solution.
Keith Richards, chief executive of the PFS, said: “This is not a generic communication for a letter writing campaign, which would have little impact and just create more paperwork for MPs.
“We are encouraging financial advisers to tell MPs and other policymakers about what is happening in their community in their own words and giving them the option of referencing the Personal Finance Society’s proposed solution as a starting point for debate in a clear and accurate way.
“I am already engaged in talks with the FCA and HM Treasury about this solution, having first written to Chancellor George Osborne in 2015 to raise awareness of the issue, which resulted in a meeting with then City Minister, Harriett Baldwin. As a result both PII and FSCS was incorporated within the subsequent Financial Advice Market Review (FAMR).
“We hope this template will allow advisers to add their voice to calls for concerns to be converted into government action.
“Consumers rights under pension freedoms are in jeopardy, access to regulated advice denied, while at the same time the public have become increasingly exposed to the devastating impact of scams. It is time for a ‘united’ approach to the issue to force our elected government to take action.”