Question to the HM Treasury:

To ask Her Majesty's Government, further to the Written Answer by Lord Bates on 25 June (HL8507), how they will measure the success of their actions to improve the market for pension advice and make advice more accessible and affordable; and when such an assessment will be made.

The Financial Advice Market Review (FAMR) has contributed to significant progress to make financial advice more accessible and affordable. The final report, published in March 2016, set out a package of 28 recommendations. HMT and the Financial Conduct Authority (FCA) have now implemented all the recommendations made to them, except the recommendation to review the outcomes of FAMR. This review will take place in 2019, with a final report published in 2020.

The FAMR final report recommended that the FCA and HMT should work together to develop an appropriate baseline and indicators to monitor the development of the advice market, which should be tracked on an annual basis and published on the FCA’s website. This baseline report was published in June last year. The indicators include measures of consumers' use of advice and guidance (the 'demand' side) and measures relating to the provision of these services (the 'supply' side).

The baseline will enable FCA and HMT to monitor developments in the market and assess at a high level the impact of the FAMR recommendations when conducting a review of their outcomes. This will include an assessment of the outcome of recommendations focused on making pensions more accessible and affordable, including the Pensions Advice Allowance and the increase in the income tax exemption for employer-arranged financial advice on pensions from £150 to £500.

One of FAMR’s recommendations was that the FCA should establish an Advice Unit to help firms develop their automated advice models. The Advice Unit has provided regulatory feedback to 22 firms looking to bring new propositions to the market since June 2016 and continues to work with new applicants. The Advice Unit has worked with 10 firms in 2016 and 12 firms in 2017. The number of firms the Advice Unit has worked with in 2018 will be released shortly.