An adviser directory being hastily tested by the Money Advice Service and which is designed to be the primary referral route for pension freedom advice, should be scrapped following an independent review demanding major budget cuts, according to Unbiased’s Karen Barrett.
The directory went into ‘beta’ testing earlier this week, at the same time as the pension reforms came into effect. Amid a number of positive features issues have been reported with elements of a service Mas has acknowledged would not yet be in the public sphere yet but for time pressures.
Ms Barrett’s comments come in the wake of an independent review of Mas, which called for its money information budget to be slashed by up to half to avoid duplication and for its focus to shift more to debt advice.
Chief executive Caroline Rookes previously said that Mas will be scaling back its own service and she revealed ahead of its formal plan that its money advice budget would fall by 20 per cent in the coming financial year.
Formal responses to the review will be provided by Mas itself and other parties before the Treasury decides on action to be taken in the Autumn.
Speaking to FTAdviser, Ms Barrett intimated the adviser directory should be included in the cull as she argued that it “duplicates what Unbiased already provides”.
Earlier this month, FTAdviser revealed the directory, which launched on Monday (6 April) to coincide with the implementation of the new retirement freedoms, now has around 4,500 advisers and 1,200 firms listed; more than double the number it had amassed a month ago.
Unbiased says it lists 12,000 retirement advisers, of which the majority are fully independent and some are restricted, but not tied to providers.
It was not chosen by the Treasury as the directory to be integrated within the formal pension guidance process in part because it favours firms that pay it for a full profile, requring users to tick a box to see in results those that provide limited information within a free alternative.
Ms Barrett has said it had offered to remove the tick-box for a new version of the directory to work with Pension Wise.
At the end of last month, Mas’s business plan revealed it was aiming to cut its money advice budget by a fifth and concentrate on debt advice and helping consumers with long-term financial planning, rather than day-to-day money management.
Ms Barrett said: “The recent changes in funding seem like the ideal opportunity for Mas to reassess its priorities and focus on what it is best placed to provide – namely, guidance for people on budgeting and on managing their money effectively.
“This is an invaluable service. But it’s a waste of Mas resources to launch an adviser directory that duplicates what unbiased.co.uk already provides.”
She added that although the retirement information journey is still developing, as everyone adapts to pension freedom, “there is a logical process emerging”.
“First of all, people should be encouraged to go to Pension Wise for basic guidance. Then, once they have an idea of their options, they are better placed to seek professional advice to build a personalised plan that gives them the retirement they want.
“Our recent research on the value of advice found 93 per cent of advisers are in agreement that retirement decisions are the most crucial advice area – even more so now that the options are much broader.
She added: “What today’s consumers need more than ever is simple and clear signposting from guidance to advice – rather than duplicated services that risk adding to the confusion.”
Mas is currently working to rectify issues with proximity rankings which are producing odd results for those advisers who are willing to travel to meet clients.
FTAdviser tested the Mas system using the example of someone who wanted face-to-face advice and had a pension pot of below £50,000. The system found just over 300 firms (31 pages) could help, but the first on the list was 188 miles away from the selected postcode.
Teresa Fritz, lead on the adviser retirement directory for Mas and Financial Services Consumer Panel member, said previously: “I can’t stress enough how early this is - in an ideal world this wouldn’t be going out to the public, even it might be very soft launched to the public.”
donia.o’loughlin@ft.com
