A rethink on ‘face to face guarantee’ for pensions advice

There has been a lot of news and comment in relation to pensions in the last few days. Yesterday, the Government published a response on the “Freedom and Choice in Pensions” consultation.

 

Not only has the Government put more detail into their plans on how they intend to deliver the “free and impartial” advice to those people at retirement looking to draw their pensions, there has also been comment regarding some of the potential product innovations that we could see in the coming years.

 

Turning first to the “free and impartial” advice.  It is now clear that the Government is not going to look to the big insurers (with the biggest pockets) to fund the advice.  Whilst this might have been an obvious route for them, there were questions about the “impartiality” of those looking to sell products, who would therefore have a vested interest, advising those looking to retire and needing assistance with their choices.  With this in mind, it looks as though the financial planning advice will be driven through the Money Advice Service and The Pensions Advice Service who will direct pension savers to “retirement guides”.  This approach seems to be sensible and pragmatic.  However, it is clear that there has been a rethink of the guarantee of free “face to face” advice.

 

At the current time the detail on the guidance that will be received and what savers should expect from their guidance provider is still unclear.  However, the complex decisions that need to be made at retirement along with the expanding horizon of products and choices that are likely to be available, we would expect that a large majority of pension savers will still be recommended to seek face to face advice.

 

Duncan Wilson

Private Client Partner

Telephone: +44 (0)20 7893 3456
Email:  getintouch [@] broadstoneltd.co.uk