Budget Predictions, Advice Risks, and Financial Inclusion

Unknown Speaker

Hello and welcome back to the B-Compliant Podcast! I'm Vicky Pearce, joined as always by the ever-enthusiastic Rachel MacRae. So, Rach—let’s just jump in, shall we? It’s been a dramatic week on the Budget front. The Chancellor, Rachel Reeves, has, well, let’s say ripped off the band-aid with her pre-Budget speech.

Rachel MacRae

She really did, Vicky! I mean, she was properly upfront, wasn’t she? Not trying to win a popularity contest, just straight up preparing us all for a tough Autumn Budget—26th of November circled on the calendar. Everyone’s talking about tax rises now, capital gains, pensions tax—maybe even income tax on the table. Though they’re saying VAT is probably safe since it’d hit the cost of living too hard, but honestly, I wouldn’t bet on much at this point.

Unknown Speaker

Yeah, she brought up the national debt—94% of GDP. That’s a staggering figure. But I genuinely think she was trying to be upfront with everyone, making it clear this isn’t just about tackling inflation, it’s also about getting the public finances back on track. We’ve seen a few clients trying to second-guess the budget, but as we’ve said before, that’s a risky move. Still, it’s human nature to crave a bit of certainty, isn’t it?

Rachel MacRae

Absolutely, Vicky, we all want to peek behind the curtain, don’t we? But it’s risky for advisers to try to make any calls before we’ve actually seen the Budget. There’s just so much speculation. We can guess about capital gains or what’s happening with pensions tax, but until we’ve got those official proposals, it’s just that—guesswork. If we give advice based on predictions and it ends up going another way, clients could make decisions they regret, and that opens us up to compliance issues. Actually, I’m still haunted by some of the pre-empted advice we saw before last year’s Budget—remember that?

Unknown Speaker

Oh, don’t remind me! And it always feels worse because the rumours start months ahead and just snowball. I keep coming back to this: no matter how persistent the questions are, we’ve got to stick to what we know, not what we suspect. The sensible thing is always—the strategy is for the long term. If we need to tweak after the 26th, we do it with the facts in hand, not with half-baked guesses. As we’ve talked about in previous episodes, compliance isn’t just knowing the rules now but staying out of trouble when the rules change, too. It’s about process and patience, isn’t it?

Rachel MacRae

That’s it, Vicky. Stick to the plan, keep the communication open, and don’t get swept up in media hype. Though, I suppose there’s always that one client who’s read every article out there and wants their adviser to double down on predictions! Gotta love it.

Unknown Speaker

Speaking of watching your step, let’s talk about something that’s very much confirmed—a case that’s got everyone in the advice world talking! The Financial Ombudsman Service ruling against St. James’s Place for not providing ongoing advice to Mrs D. This one should be a wake-up call, especially for anyone with ongoing service agreements. Rach, break it down for us?

Rachel MacRae

Yeah, this one’s a bit of a cautionary tale, isn’t it? So, Mrs D engaged SJP back in 2013 to sort out her pensions—about a hundred grand consolidated, plus a lump sum from her employer. It all went into an SJP retirement plan and ISA; so far so good. But here’s the kicker—fast forward to 2024, Mrs D says, hang on, I’ve been paying for ongoing advice and reviews, but I’ve not actually had them, particularly that ISA review in 2018. And she’s right. The FOS agreed, said SJP failed in that service commitment, and ordered them to refund the fees for the missed review, with growth, and provide a breakdown—so no hiding the sums.

Unknown Speaker

It’s a classic case where the original advice—the consolidation, the ISA—wasn’t found lacking. It was the ongoing bit, the regular servicing, that fell down. We’ve talked about this before, the importance of doing what you say you’re going to do. These ongoing agreements—they’re not just fine print in the client file. They’re a living promise. If you let those slip, the consequences aren’t just a slap on the wrist. It can get expensive, and you’ve got to pay compensation, potentially with investment growth added in.

Rachel MacRae

Exactly, and it’s not just about offering the service, you need to prove you’ve delivered it. Evidence, paperwork, emails—it all matters. If the review didn’t happen, or if there’s no record that it did, from the regulator’s perspective, it didn’t happen. That can open you up to complaints, reputation damage, everything. There’s a thread here with what we discussed in past episodes about client engagement and proper record-keeping, right? It’s not “nice-to-have,” it’s the backbone of good compliance.

Unknown Speaker

Couldn’t agree more, and I’d say to anyone listening—now’s a good time to check your ongoing advice frameworks, dig into those client agreements, and make sure you’re on top of every commitment. Missed reviews might feel minor, but the fallout can be huge. Don’t rely on memory—make it auditable. We’ve all seen how these cases play out, and the industry only benefits when we keep our promises. Simple as that.

Rachel MacRae

Alright, Vicky—let’s shift to something a bit broader but still crucial for our industry: financial inclusion and capability. The FCA’s Chief Executive, Nikhil Rathi, made a really strong case at the Delivering Financial Inclusion Together conference. His whole thing is, access to products is only half the journey. If people don’t have the confidence or knowledge to actually use those products well, we’re only half-way there, aren’t we?

Unknown Speaker

Yes, and it’s such a recurring theme. It was in his speech—closing what he calls the “capability gap”. Even with all the progress on things like affordable credit and digital banking, especially on your phone, people—especially vulnerable groups—still find it hard to keep up. We still see it; people feel lost or are just not confident making decisions. And the speed of digital change has left a lot behind. Rathi said, more or less, that capability can’t just be a community add-on—it’s gotta be baked right into the way products are designed.

Rachel MacRae

Yeah, it’s all very well having access, but if I—well, if I, Rachel, don’t know how to properly use this brilliant new product, it’s just a shiny bauble, isn’t it? And what struck me is the FCA isn’t just talking—they want to make it easier for firms to innovate responsibly, actually providing support to products that promote inclusion. Plus, they’re gathering evidence and data as a foundation for better, more joined-up action, not just piecemeal efforts here and there. Collaboration’s going to be key—government setting policy, MAPS leading delivery, our sector folding capability into every client journey.

Unknown Speaker

That’s right, and to be honest, there’s a lot of good intent in the industry at the moment. I think, as regs evolve—and as we keep saying, don’t we Rach, they never stand still—the real win is for firms to go beyond just ticking the “inclusion” box and make sure their products and communications actually empower people. Rathi’s message was—let’s build capability and inclusion together. It’s not just a regulatory responsibility, but a moral one. That’s how we build trust for the long haul, in my mind.

Rachel MacRae

Nicely put, Vicky. Well, I think that’s a good place to wrap things up today. We’ve covered a pretty wide spectrum—from Budget nerves to the nitty-gritty of ongoing advice, and now this push for capability and inclusion. As always, loads to keep an eye on, so we’ll be back next time with whatever the regulators have in store for us next! Cheers for the chat as ever, Vicky.

Unknown Speaker

Thanks Rach—and thanks to all of you out there for tuning in. Stay safe, keep compliant, and we’ll see you on the next B-Compliant Podcast. Bye!