It may be too late to start questioning why and how advisers were not included in the plans for retirement guidance.
No doubt the received wisdom from policymakers went as follows:
Advisers are currently focusing – mostly – on better-off clients. They do not offer a mass-market service, which is what will be required to meet the demands of the retirement guidance guarantee.
It is also important, according to the guidance paper, to use organisations without bias or vested interests to offer the service. Thus it cannot be pension providers with their track record of dreadful communications surrounding the open-market options.
Hence the guidance guarantee is to be offered by the Money Advice Service (MAS) and The Pensions Advisory Service (TPAS).
Costs aside, how sensible is the separation of advisers from guidance? John LappinInvestment advisers will be paying for these services with a suggestion in the paper that they will benefit. This is, of course, complete bunk. Investment advisers will not benefit from guidance specifically. If anything, it will only confuse matters for advisers and their clients and could conceivably cost them more not less.
The real reason is there is no money in the government kitty.
Adviser bodies need to make sure this is the very last time the government and regulator stick their bear paws in this particular honey pot.
Yet costs aside, how sensible is the separation of advisers from guidance?
Better coordination of the two key papers published in recent weeks – the barriers to advice paper and the guidance paper – might have allowed a simpler system, with MAS and TPAS in the mix, but also investment and workplace advisers too.
The organisations that are expected to shoulder the guidance burden are relatively untested at these levels of demand, certainly for complicated retirement decisions. What if it all goes wrong?
What if advisers, providers, platforms and trustees find themselves attempting to steer their clients, investors and policyholders away from bad decisions encouraged by poorly delivered guidance and unqualified guides?
It is probably too late on this timetable, but might it not have been better to devise a credible, simplified form of advice and then allow advisers to offer retirement guidance as part of that simplified regime.
IFA clients might receive full advice without the need to seek guidance and indeed offer guidance to a mass market, as an accredited supplier. Workplace advisers could offer similar guidance as part of their service, and MAS and TPAS would be under less pressure and could serve the remainder of the population.
That would stop people potentially receiving almost too much advice, information and guidance, with contradictory messages.
Finally, what if guidance fails to pass muster? Is it inconceivable to imagine MAS hauled before MPs in a year or two, answering questions about why the retirement guarantee went so awry?
Maybe advisers will be asked to ride to the rescue. But to do so, someone has got to bring clarity to the FCA’s rather confused ideas about simplified, basic and limited advice. That does not seem to be on the agenda. Not yet anyway, but there’s a long way to go.
John Lappin blogs on industry issues at www.themoneydebate.co.uk
