Personal Finance Society seeks explanation from BoE over chief economist’s misinformed comments
26 May 2016
The Personal Finance Society has expressed its disappointment over recent comments made by Bank of England chief economist Andy Haldane, and has written to the BoE for an explanation of the timing and grounds for the public remarks.
At a time when the advice profession continues to make great progress in restoring public confidence and awareness of the sector, such a broad and sweeping statement from a senior figure within the BoE undermines the importance of restoring confidence and trust in retail financial services.
Speaking at an event for think-tank New City Agenda in London on 18th May, Mr Haldane confessed to not being able to make sense of recent changes to pension regulation, and that conversations with financial advisers had proven “they have no clue either”. “That is a desperately poor basis for sound financial planning,” Mr Haldane said.
The Personal Finance Society alone has over 24,000 qualified adviser members with 5,060 at Chartered Financial Planner status and a further 8,500 holding advanced specialist qualifications on route to level six. All are required to undertake ongoing training, including a minimum of 35 hours of compulsory continuing professional development (CPD) each year.
Personal Finance Society chief executive Keith Richards said robust education, training and development standards were specifically developed to ensure advisers were equipped with a comprehensive understanding of pension regulation and the changing dynamics of financial planning in retirement.
“Although the pension landscape can be complex, which is why the government has mandated professional advice within pension reforms, to suggest that advisers generally fail to understand pension complexity is both offensive and misinformed,” he said.
“Indeed most financial advisers commit themselves to life-long learning in order to keep up to date with the ever-changing regulatory environment and more than 7,000 have additionally taken the dedicated pension reforms paper since May 2015.”
“Mr Haldane’s comments demonstrate a lack of fact-based insight, knowledge of the market or due consideration of public best interests and I have written to the BoE in the hope that we can work together to constructively raise public confidence and trust at such a critical time.”
The Government and FCA jointly led the recent Financial Advice market review (FAMR), which had the primary objective of seeking ways to increase access to advice and raise public confidence to engage.
A recent survey conducted for the Personal Finance Society revealed that the trust and confidence of consumers who use financial advice has increased by 40% since 2013. In 2013, 43% of advised consumers said they trusted the financial advice sector, jumping to 60% earlier this year.
“As a profession we are proud of the work we have done to restore public trust and confidence to engage, and while I acknowledge there is work to be done, professional advice is increasingly being recognised for the vital role it plays in retirement planning in the wake of recent pension freedom changes,” Mr Richards said.
“While it is understood Mr Haldane’s comments were made in the context of a need for better financial education – a view I completely endorse – they come at a time when people need access to financial advice more than ever.”
“Public comments that might erode trust in the advice profession are counter-productive to the profession’s efforts to educate and engage with consumers at such a critical time.”
“By opening communication channels, I hope to gain a better understanding of any concerns the Bank of England might have, and work together to improve public education and awareness of the importance of pension and retirement planning.”
