RegulationOct 22 2014

Treasury’s guidance choices surprise Garnier

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The Treasury’s choice of the Citizens Advice Bureau to give face-to-face guidance alongside telephone-based help from The Pensions Advisory Service was a “surprise”, Mark Garnier MP has said.

The MP for Wyre Forest in Worcestershire and member of the Treasury select committee said: “I am as surprised by the inclusion of the CAB as at the exclusion of the government’s Money Advice Service.

“CAB, like Mas, is more general in the advice it provides, while TPAS is more specialist.”

His comments came after the Treasury announced its choice of guidance providers, leaving the industry-funded Mas out of the picture. Alongside the guidance, there will be an online service included as part of the scheme, developed in association with the CAB and TPAS.

The government is also set to legislate over the next week on underpinning the guidance, including making any imitation of the guidance service a criminal offence.

When asked how the CAB could afford to run the service – the organisation suffered a 10 per cent cut in funding in April 2011 – a spokesperson said: “It is agreed that providing guidance will require funding. The government is due to publish estimated costs for providing this service and we will be funded.”

Last week, a survey conducted by the Chartered Insurance Institute revealed that 92 per cent of people approaching retirement were considering using the scheme. Laurence Baxter, head of public affairs at the CII, said: “Both CAB and TPAS have the demonstrable competence in the subject that consumers said they wanted.”

Keith Richards, chief executive of the Personal Finance Society, agreed that it made sense to award the delivery of guidance to TPAS and CAB. He said: “There was always some confusion between the roles of Mas and TPAS, as both are geared up for remote and web support.

“TPAS is better established to deliver remote retirement guidance, and has done it on a more realistic budget compared to Mas. Perhaps the smaller budget and budgetary controls employed by TPAS reflect the fact it is taxpayer-funded, compared to Mas, which is industry-funded.”

Last month the PFS and Mas exchanged correspondence over comments made by Caroline Rookes, chief executive of Mas, about her lack of faith in the ethics of advisers. A letter from the PFS prompted an apology from Mas the following week.

Adviser view

Ian Gutteridge, a director at Croydon-based Premier Benefit Solutions, said: “I would like to see the people providing this service being at the top of their game. Nothing against CAB, but I would rather this were being done by technicians such as TPAS. I am sure the CAB will substantially upskill the people providing face-to-face advice.”