Government’s plans for free financial advice welcomed

The government has recently announced plans for a free financial advice service to address the needs of the UK adults who have been poorly served by existing systems.

Economic Secretary to the Treasury, Ed Ball, said: ‘Financial products are complicated and there can be too much jargon. This puts people off, or they can end up buying something that is not right for them. Sometimes people just want to discuss their financial options and not buy anything. We believe there is a gap in the provision of this last type of advice - generic advice - and I have asked Otto Thoresen to research and design a national approach for filling this gap. I am determined that we should extend the benefits of generic advice to all consumers who need it.’

SG Wealth Management, a fee based advisory service, has been quick to welcome the move, which it says is ‘long overdue’. It says the government’s new service will save millions from the ‘awful advice handed out by banks and by commission-driven IFAs - and also from sinking into the quicksand of debt.’

According to the advisory service many people have been poorly servced by those who push their own products or who sell single products rather than providing an objective and comprehensive advisor service. Indeed, SG Wealth Management says that many government initiatives to help consumers manage their finances better have failed because of the ‘inability of the consumer to find quality, impartial advice that is genuinely in their interests rather than those of the adviser and the firm he or she works for.’

The firm sees a brighter future if the government succeeds in the provision of sensible and straightforward financial advice. The government’s plans have also been welcomed by a range of other organisations, including the Financial Services Consumer Panel and consumer organisation Which.