Otto Thoresen's final report sets out the groundwork for a ‘national money guidance service’ which, using a partnership model, would offer consumers ‘sales-free’ advice on all aspects of financial planning.
The findings have been welcomed by the FSA, and Thoresen congratulated by its chief executive Hector Sants for 'setting out a clear road map for taking this work forward'.
Sants added that its recent initiatives would stand the regulator in good stead for the development of this service, which aims to empower ordinary people with the ‘knowledge, understanding and confidence to make better decisions about money issues’.
It is thought that thorough development and trial of the service will take approximately two years. Once implemented, it would be available over a variety of mediums including telephone, internet and face-to-face.
Furthermore the projected cost is to be equally split between the government and the financial services industry.
Otto Thoresen said: "I believe that good money sense needs to be as much part of people's lives in the 21st century as healthy eating and keeping fit.
"Money Guidance will help people deal with the money matters that shape their everyday lives - budgeting their weekly or monthly spending, saving and borrowing, insuring and protecting themselves and their families, retirement planning, and understanding the technical language that we in the financial services industry too often use.
"People have told us that they want and would act on this guidance. In research we commissioned 75 per cent of people surveyed said they would use a 'national information and guidance service for personal finance issues'. Of these, over 25 per cent felt that they would be very likely to use this service.
"And evidence from our practical prototypes suggests that eight out of ten participants took at least one action within a week or so of using the service. Over half of these took specific action, such as buying a new product or speaking to a regulated adviser.
Significant emphasis would be placed upon the sales-free approach of the scheme, with principles of supportiveness, crisis prevention and universality taking on a greater importance.
Indeed the review outlined that 'Money Guidance’ should focus on giving people information and guidance on budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits, and jargon busting - but not to recommend specific products.
Thoresen insisted that it should work with structures already in place, such as advisers, rather than compete against them.
Chris Cummings, director general of the Association of Independent Financial Advisers (AIFA) gave his full backing: "We support the objectives behind the Thoresen Review. Generic financial information can provide a first step for consumers to address these issues but we must ensure it is a first step towards more professional financial advice."
Cummings added that the trusting relationship between IFAs and their clients put them in a 'unique position' to help improve the nation's financial wealth - one which must be capitalised on.
