Misguided Efforts: The Confusion Between Financial Literacy and Regulation

A Product Distributor is not a Financial Coach!

The recent response from HM Treasury to the concerns raised by financial advisers in the UK has sparked a debate that goes beyond mere regulation. The Treasury’s acknowledgment of the need to improve access to financial advice across Britain is commendable, but the confusion between regulations on financial product distribution and financial literacy and wellbeing issues is alarming.

The Campaign and the Confusion:

A campaign orchestrated by a financial adviser publication encouraged financial advisers to write to their MPs, complaining about the regulatory burden on financial advisers. The Treasury’s response, however, seems to have missed the mark.

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The economic secretary to the Treasury, Andrew Griffith, responded with a pledge to work closely with regulators to help more Britons access financial advice. However, his letter reveals a misunderstanding of the core issue at hand. The confusion between regulations on financial product distribution and financial literacy and wellbeing is evident.

The Real Problem:

People with no savings to invest don’t need access to investment salesmen. You can’t empty the pockets further of those who have empty pockets. The real need is for strategies that generate cash flows, filling the pockets of those in need. This is not a service provided by the FCA regulated adviser community, who are merely distributors of regulated financial products.

A Shocking Revelation:

It is shocking that either Andrew Griffith doesn’t understand what financial advisers do, or he is in league with the unaccountable hierarchies of profit and power to promote their asset gathering strategies.

The Need for Clarity:

While the government’s efforts to improve financial literacy and wellbeing are essential, they must not be confused with the regulatory burden placed on financial advisers. The disproportionate regulation on small advisory firms, regulatory fees and levies, and the overall impact on the provision of financial advice must be addressed separately.

In Short:

The Treasury’s response to the campaign is a step in the right direction, but it falls short of addressing the real concerns of the financial adviser community. The confusion between regulations on financial product distribution and financial literacy and wellbeing must be clarified. People with empty pockets need strategies that generate cash flows, not mere access to investment salesmen. It’s time for the government to understand the real issues at hand and act accordingly.