FAMR won't help close the advice gap, say advisers

55% of the advisers surveyed by Panacea Adviser added that they are not planning to develop a simplified advice solution for lower net worth clients who can’t afford or don’t want to pay for advice.

The survey also revealed that the new pension freedoms are now seeing almost 80% of advisers surveyed recommend drawdown to clients over an annuity.
Asked about the UK’s planned departure from the EU, 42% of advisers said the move could prove damaging to their business, while 58% said it would not have a negative effect on advice firms.

Panacea Chief Executive, Derek Bradley, said: “The arrival of FAMR was met with some surprise when launched earlier this year, with many arguing that it did not produce the focus and tangible actions that the industry needs to move forward. This feeling is clearly echoed in our survey, with advisers suggesting that FAMR will not be able to deliver its key aim of filling the advice gap and will therefore fail consumers.

“There has been much speculation whether the pensions overhaul would mark the death of annuities, and while annuity sales have yet to see the significant drop that would come with this, our survey indicates that adviser demand for annuities could certainly be waning.

“Amidst the short-term market volatility and political upheaval that has taken place since Brexit, it is positive to see that advisers remain confident in the outlook for their business: sentiment which will hopefully have been passed onto clients by providing reassurance and sound financial advice.”