Gaps In Advice Research Articles

Adviser Compensation, Endogenous Entry, and the Advice Gap

To prevent biased advice, regulators increasingly ban commission payments to financial advisers. Such bans are associated with “advice gaps,” meaning that advice becomes less accessible. To understand the trade-off between the quality and accessibility of advice, this paper develops a model of price competition in advice markets with endogenous entry of advisers. While commission bans increase consumer surplus in the short run, they hurt the profitability of advisers. In the long run, advisers exit the market, advice becomes inaccessible, and consumer surplus decreases. These results imply that accounting for the endogeneity of market structure is important when regulating advice. (JEL D82, J33, L51, L84, L88, M52)

Shaped by the Rules. How Inducement Regulation Will Change the Investment Service Industry

Abstract Inducement regulation is intended to target the conflict of interests between financial advisors and their clients. Nonetheless, it may also represent a ‘public policy device’ meant to conform the activity of European distributors with investor protection goals; indeed, by selecting the conditions under which distributors can freely collect inducements, the European regulator simultaneously shapes the market for financial services. Accordingly, ‘spot advice’ (which poorly performed in the past) is indirectly banned by the quality-enhancement provision set forth in art. 24 MiFID II, and the acknowledged importance of on-going monitoring of the portfolio opens up the collection of inducements linked to the provision of ‘periodic advice’. Since this new regime will probably increase the overall costs of investment advice enlarging the ‘advice gap’, the European regulator tries also to foster the development of FinTech permitting the collection of inducements even outside the strict provision of investment advice. Nevertheless, the concerns regarding investor protection raised by FinTech services (which allow only a mere ‘self-assessment’ of the investor’s profile) suggest a broader interpretation of inducement regulation, with the purpose of enabling investment firms to provide low-cost financial advice capable of effectively encompassing every stage of the investment relationship, from the early assessment of clients’ characteristics and objectives to the on-going management of the investments (‘simplified advice’).

Identifying opportunities for strengthening advice to enhance vegetable liking in the early years of life: qualitative consensus and triangulation methods.

To prioritise and refine a set of evidence-informed statements into advice messages to promote vegetable liking in early childhood, and to determine applicability for dissemination of advice to relevant audiences. A nominal group technique (NGT) workshop and a Delphi survey were conducted to prioritise and achieve consensus (≥70 % agreement) on thirty evidence-informed maternal (perinatal and lactation stage), infant (complementary feeding stage) and early years (family diet stage) vegetable-related advice messages. Messages were validated via triangulation analysis against the strength of evidence from an Umbrella review of strategies to increase children's vegetable liking, and gaps in advice from a Desktop review of vegetable feeding advice. Australia. A purposeful sample of key stakeholders (NGT workshop, n 8 experts; Delphi survey, n 23 end users). Participant consensus identified the most highly ranked priority messages associated with the strategies of: 'in-utero exposure' (perinatal and lactation, n 56 points) and 'vegetable variety' (complementary feeding, n 97 points; family diet, n 139 points). Triangulation revealed two strategies ('repeated exposure' and 'variety') and their associated advice messages suitable for policy and practice, twelve for research and four for food industry. Supported by national and state feeding guideline documents and resources, the advice messages relating to 'repeated exposure' and 'variety' to increase vegetable liking can be communicated to families and caregivers by healthcare practitioners. The food industry provides a vehicle for advice promotion and product development. Further research, where stronger evidence is needed, could further inform strategies for policy and practice, and food industry application.

Financial Advice and Robo Advice in the Investors' Perception. Evidence from a Qualitative Study

The ongoing institutional debate wonders whether robo advice may potentially bridge the advice gap, by reaching both ‘underserved' and ‘excluded' investors, who are unable to fully access the service. The present work aims to investigate the factors that may trigger both potential and actual interest in robo advice, thus contributing to widen the segment of investors receiving personalised recommendations. The study analyses the qualitative evidence gathered from two focus groups and four in-depth individual interviews, all involving investors. The participants in the focus groups are, respectively, investors supported by a human financial advisor (i.e., making decisions after receiving a customised recommendation by a dedicated advisor) and individuals interacting with bank staff only (i.e., making decisions without the support of a dedicated advisor). Individual interviews involve four users of one of the main providers of automated advice services active in the Italian market. Overall, the study highlights that the perceived objectivity of the algorithm and the customer experience granted by a digital platform may trigger (or have already triggered) interest in robo advice, mainly among financially and digitally literate investors. However, the hybrid model is always preferred to the pure automation, as the interaction with a human advisor is deemed as valuable both on educational grounds and in the occasion of key phases of the investment (e.g., portfolio monitoring or market turmoil). Given the evidence of this qualitative study, therefore, the hybrid robo advice can potentially bridge the advice gap for the more sophisticated investors, to the extent that they are willing to accept technology developments. To our knowledge, this is the first qualitative study that contributes to the debate on the advice gap by providing food for thought important for consumer protection policies and educational initiatives.

The retail distribution review

Purpose The purpose of this paper is to review the effect of reforms to the UK’s retail advice sector as a result of the Retail Distribution Review (RDR). Design/methodology/approach The paper takes the form of a review of the RDR in the context of the Financial Advice Market Review (FAMR). Findings There is a lack of clarity, experienced by both consumers and financial advisers, concerning the nature of “advice”. This results from the use of an array of regulatory and non-regulatory terms. Whilst enhancing professionalisation and reducing commission bias, the RDR is failing to address the needs of many financial consumers – identified by many as an “advice gap”. It is argued that the focus of the RDR, and previous reforms, on addressing market failures may be misplaced. Practical implications The paper provides an analysis designed to help in the process of developing a retail advice sector that meets the needs of consumers, in the context policy reforms placing more emphasis on the responsibilities of individuals for financial planning. Social implications The study has the potential of better outcomes for consumers and reputational returns for the financial services sector. Originality/value This paper is a review of the current regulatory issues facing financial advisers and retail consumers in the context of the RDR and FAMR.

European Commission appoints top scientists to fill policy advice gap

European Commission appoints top scientists to fill policy advice gap

Study Reveals Gaps in Advice to New Mothers on Infant Care

Study Reveals Gaps in Advice to New Mothers on Infant Care

Retail Distribution Review: New Paradigm for Investment Services Regulation?

The article analyses the consequences of the Retail Distribution Review (RDR) in the UK market and its potential for implementation in other EU Member states. The RDR was launched in 2007 with the underlying aim to improve retail distribution through market-led solutions supported by regulation where necessary. The RDR targeted at three main problem areas: Labeling of advisory service (independent/restricted), Remuneration (including ban on commissions) and Professionalism (minimum qualification and maintaining of knowledge). The article describes the initial situation in the UK investment market, main problems identified by the Financial Services Authority, main building blocks of both the RDR and Thoresen Review of Generic Financial Advice, implementation of the RDR and its European legal dimension. The article further analyses the impacts of the RDR implementation using qualitative analysis. Particular attention is paid to the advice gap as one of the consequences. The article also discusses the possibility of RDR implementation in the Czech financial market. This article reflects state of affairs as per the end of March 2014.

Neovascular age-related macular degeneration: decision making and optimal management

To review the decision-making processes and dilemmas in the delivery of services for neovascular age-related macular degeneration (nAMD) and describe its optimal management. Review of literature and presentation of illustrative cases. Guidelines are available to aid commissioners and providers of services but with important gaps in advice. Increasing awareness of variants and diseases that mimic nAMD means that clinicians need to carefully assess lesions at presentation, using stereo imaging, fluorescein and indocyanine green angiography, and new generation optical coherence tomography. Current evidence supports the use of ranibizumab as first-line therapy. Evidence is unclear on the most appropriate treatment regime, especially in protocols relying on clinician-determined re-treatment. Current consensus recommends initiation with monthly injections for 3 months followed by maintenance comprising regular monthly visits with clinician-determined re-treatment. Further evidence on treatment protocols and the comparison with bevacizumab is awaited. Owing to incomplete evidence base health professionals face a large number of controversies and dilemmas in care pathways for patients with nAMD. Treatment should be delivered against protocols developed locally in a systematic manner with consensus and a cautious approach to change.

Engineering more engineers — bridging the mathematics and careers advice gap

AbstractThe popularity of engineering degrees among undergraduates is in decline. There are many barriers affecting the supply of engineering undergraduates and the School of Technology at the University of Glamorgan has identified lack of awareness of what engineering entails and lack of mathematical preparedness as two principal barriers to potential students studying engineering in higher education. To show how the School of Technology overcame these barriers, the role of the Network75 Recruitment and Support Officer will be explained along with the subsequent development of a remedial summer mathematics programme entitled ‘Bridging Technology with Mathematics’. These two initiatives are outlined and their success evaluated in terms of increasing engineering undergraduate enrolments for the academic year 2005/06. This paper would be of interest to anyone working in the field of engineering recruitment and admissions, as this programme can be replicated by other further education or higher education pro...