The country is more than a month in with the new government, but one criticism of Labour throughout the election campaign was aimed at a lack of detail of their plans for government.
This included the financial services sector wanting more detail on what a Labour government would do once in power.
Whenever the new chancellor of the exchequer Rachel Reeves was interviewed pre-election, it would take very little time for her to mention ‘growth’.
Yet, although we are therefore aware of the aim, we know less about the route to achieving this.
The financial services sector also regular cries out for another buzzword of the Labour campaign: stability.
The best regulatory environment for firms is a stable and certain one. When looking at what Labour may do, it is important to view the potential upcoming regulatory changes through these lenses of growth and stability.
Across the sector, the message I hear to the Labour government is to make their intentions clear and to do this early enough to allow firms to have time to implement changes in an orderly and efficient manner.
While detail has been light, there have been indications and documents produced that mean we can set out some changes that we are expecting to come down the track and predict others.
However, it remains to be seen how the expected changes are implemented, in particular where they involve a conflict between growth, stability and consumer protection.
The starting point for horizon scanners is the plan Labour unveiled in January for the financial services sector, titled "Financing Growth”, which includes many changes that will impact advisers.
The plan acknowledges the potential conflict between competing factors, stating the plan is to balance consumer protection, competitiveness and financial stability.
The proposed changes that will likely affect advisers in particular include changes to the advice/guidance boundary, longer-term fixed rate mortgage products, 'green' mortgages, a slimmed down Financial Conduct Authority handbook, and enhanced consumer protection (noting, in particular, the potential conflict between the last two points raised here).
Changes to the advice/guidance boundary
Labour’s plan highlights that only 8 per cent of UK individuals have received advice from financial advisers, stating that it sees a need to address this advice gap – a position that is widely supported in the industry.
One way it has identified it can achieve this is reforming the advice/guidance boundary, which is an area the FCA has been looking at for some time.
This is an area where many in the industry will welcome certainty, with some firms currently being very cautious due to a fear of stepping over the boundary.
The FCA has previously also looked at other solutions, including targeted support – a regime for providing support based on target markets rather than individuals – and simplified advice – a regime for providing advice based on individuals but limiting it to relevant information about a specific need.
