PIMFA welcomes FCA proposals for core investment advice but warns they risk being undermined by unnecessary restrictions

1 March 2023

PIMFA welcomes FCA proposals for core investment advice but warns they risk being undermined by unnecessary restrictions

PIMFA, the trade association for wealth management, investment services and the personal investment and financial advice industry, has welcomed the Financial Conduct Authority’s (FCA) consultation on broadening access to investment through the provision of core investment advice.

PIMFA, which has previously set out proposals of its own for a Simplified Advice regime, broadly supports the FCA’s core investment advice proposals and is committed to the success of the proposals. But it remains concerned about the commercial viability of the proposals as currently envisaged.

The decision to place a lifetime limit on the amount an individual could contribute and the proposed restriction on transfer amounts into a stocks and shares ISA are, PIMFA believes, unnecessary and should be removed.

Simon Harrington, Head of Public Affairs at PIMFA commented: “The FCA’s proposals are well intentioned and largely strike the right balance between removing some of the barriers to accessing advice and maintaining the value of supporting individuals to make the right decision, or at least one which is broadly appropriate to their circumstances.

“While we are committed to making these proposals work, we do have concerns about their commercial viability, which are largely a result of what we consider to be the unnecessary restrictions that have been placed on the regime. Of concern to us are the lifetime limit of contributions at £20,000 and the ban on transfers in.

“We understand the reasons behind these restrictions – namely a desire to ensure that this service remains transactional – but this ceiling restricts the ability of firms to make what the FCA is proposing  a commercially profitable service for firms to offer.

“More broadly, it speaks to a wider concern that we have around these proposals: that it acts as a means to sell ISAs, rather than acting as a service that allows individuals to build wealth with some professional support over the long term.

“These criticisms are not insurmountable in our view. The proposals are welcome but run the very real risk of being undermined by their design. To give them their best chance to succeed, the FCA must review the £20,000 limit and transfer ban as a matter of priority.”

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NOTES TO EDITORS

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225