The government must clarify the difference between guidance and regulated advice, and how the guidance service would fit with regulated advice, if the free guidance is to work, Jonathan Lipkin from the Investment Management Association has said.
In his response to the FCA’s consultation, the director of public policy at IMA, said: “We suggest the government considers how the guidance service could be used to provide assistance through both the accumulation and retirement income phases.”
The FCA said it had received “mid-100” responses from across the industry to its guidance guarantee consultation, which closed on 22 September.
Mr Lipkin stressed the need for people to have access to ongoing support before, on and through retirement to enable them to make correct financial decisions over time.
He said alongside strong pension scheme governance, and good default strategy design, the guidance can help in what may often be a complex decision-making process.
In his response, Tom McPhail, head of pension research at Hargreaves Lansdown, called on the government to replace the wake-up packs with a pensions passport, designed by the Pensions Income Choice Association.
The passport is a simple statement of the value of an investors pension pot and acts as a trigger to initiate the pre-retirement shopping around process, he said. With out it, investors would not be given a fair chance to shop around.
Mr McPhail also called for a single, well-governed directory of retirement income providers.
Steven Cameron, Aegon’s regulatory strategy director, suggested that the guidance guarantee be integrated with the plethora of already existing quality advice and guidance services.
He said: “In our consultation response we set out why other forms of advice and guidance, delivered many years before and after an individual access the guidance guarantee are every bit as important to making a success of the new retirement flexibilities.
“This means the guarantee needs to integrate seamlessly with established services, with signposting out of the service arguably even more important than signposting in.”
Advisers should pay no more than 6 per cent of the guidance guarantee levy, as they will not be the main beneficiaries, with other fee blocks set to benefit three times more than advisers, Ken Davy, chairman of Simplybiz, has said.
In his response, he said: “We are also very concerned that the levy is handing a blank cheque to the organisations tasked to deliver the guidance. We are not against the service itself; however it is vital that the costs are shared equitably and properly controlled.”
