What do you mean by generic financial advice?
A successful financial capability initiative will use a range of different ways of helping people acquire financial skills and knowledge. This will include the use of education, information and advice (see diagram above). Education teaches skills and knowledge. It can be delivered through schools and colleges or through alternative routes, such as the workplace or over the internet. It underpins all financial capability work. Information provides individuals with facts, data and opinion through a range of channels, including all types of education and using all types of advice services.
Advice services are guided, interactive and personalised.
A Working Definition of Generic Financial Advice
We have adopted a working definition of generic advice. We are conscious that this definition begs lots of questions, which is why we call it a working definition. We will refine it as we answer the questions in the next phase of work.
The working definition is: “Services and tools that use information about individuals’ circumstances to help them to identify and understand their financial needs and to plan their finances. Generic advice helps consumers to identify:
- choices and possible priorities for action which are appropriate to their needs;
- how to take the next steps in addressing their priorities; and
- how to access other relevant sources of information and advice.”
Generic advice responds to information about an individual, in order to identify priorities. It does not result in a recommendation for a specific product or service. It is distinct from any sales process or channel. However, it may help people to make better use of regulated advice which they have already obtained or which they obtain in future.
Generic advice can also provide a gateway to a separate and regulated sales process. Generic advice services and tools are likely to provide information, or pointers to information, as well as advice. The information could be tailored to the individual’s circumstances. So, for example, someone who is dependent mainly on state benefits could be given information about relevant benefits or pointed to relevant sources of information.