CompaniesJul 23 2014

Pica to revisit annuities-centric adviser directory

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

The Pensions Income Choice Association is set to revisit its ‘pensions passport’ following the recent announcements on pension flexibility, as well as updating its ‘at retirement’ adviser directory to ensure it is relevant in the post-Budget market.

Earlier this week it was announced that independent associations such as the Pensions Advisory Service and the Money Advice Service would be offering consumers the government’s much lauded ‘guidance guarantee’.

It is widely regarded that this will help to push more to take full advice where they would benefit from a ‘final at-retirement decision’, but most assert that a retirement directory is needed to help those delivering the guidance to signpost effectively.

The Money Advice Service is looking to launch a free directory, though concern was raised over the criteria it may set for entry into the list.

In January this year, Pica rolled out ‘Pick-A’, a retirement directory that will act as a ‘shop window’ for regulated retirement specialists, though is currently seen as being designed particularly with the open market option for annuities purchase in mind.

When FTAdviser asked Pica’s chairman, Tom McPhail whether this can be used in conjunction with the retirement guidance, he said that Pica is looking at how to take it forward.

He said: “I agree it could be used [to signpost to advisers following the guidance guarantee]. We look to relook at the eligible criteria but we have done legwork, we have a system in place, etc.”

Speaking to FTAdviser, Michelle Cracknell, Tpas chief executive, added that it was an option to work with Pica.

She said: “Pica has done some work on [the directory] but I think they’ve said there is further work that needs to be done to fine-tune the options, especially with the changes in the Budget.

“The directory was written prior to the Budget, so again it needs to move away from perhaps the focus which was on different ways of buying an annuity that exists at the moment.

“But we would be very keen to work with organisations like Pica who have a directory in place, we certainly don’t want to reinvent the wheel or have a proliferation of directories, so we would be very keen to work with anybody that can start improving the signposting that we currently give to people when we know that they need advice.”

Two years ago, Pica suggested to the Workplace Retirement Income Commission that shopping around for retirement income could be made easier by replacing the default annuity option with a ‘pension passport’.

The ‘pensions passport’ is now looking to become a reality as the government’s response to the pension consultation said: “To get the most out of a guidance session, individual savers will need to have some information to hand (for example on the size of their pension pot).

“A number of respondents favour some form of ‘pensions passport’ that would provide the necessary information in a convenient and easily understandable format.

“Many individuals, however, have their pension wealth spread across multiple pots and schemes, and need the full picture in order to make an informed decision. The government will work with the FCA, The Pensions Regulator, industry and other key stakeholders, to consider how individuals can quickly and simply access information on multiple pots in an easily usable format.”

Mr McPhail said: “The pensions passport wasn’t perfect but it was a template document to work from. The world has moved on from there. Should we be looking at redesigning the passport and taking it back to the FCA?

“All our work has relevance. There is more work to do around the pension passport going forward.”