IFAs are increasingly giving their seal of approval to the idea of a financial advice voucher for those aged 55 and over.
Former pensions minister Steve Webb has also said the possibility of a voucher system for IFAs should be explored in a bid to cut costs of the Pension Wise guidance service, and last week LV= life and pensions boss Richard Rowney endorsed the idea.
Jonathan Rowley, director and IFA at Sheffield-based advisers Hamlet Wealth Management, welcomed the idea. He told Financial Adviser: “For one, you get initial public interest as people like to think there is something on offer you can take advantage of.
“Also, although the government may not want to sign up because of the cost, if you compare the cost with the government costs of other initiatives it would be very good value. So I would wholeheartedly support it.
“My only concern is who would they get advice from, and would all financial advisers offer advice? £250 would allow you to help people talk through the options.
“It will not cover the whole cost of regulated advice, but would be supported by the IFA community, and help narrow down the options and work from an educational viewpoint.”
Believing that a voucher system would open people’s eyes to other deals on the open market, Mr Rowley – whose clients are mainly high net-worth individuals – added: “As with annuities, once you have made a decision there is no going back. Sometimes people need a bit of a helping hand to realise the benefit of shopping around. It is not all much of a muchness, as people say. There are huge disparities in cost.”
Malcolm Tarling, chief media relations officer of the Association of British Insurers, said the trade body has not endorsed the voucher idea. He said: “Different insurers will have their own ideas on how to encourage greater take-up of financial advice.”
Key points:
■ The scheme comprises one or multiple vouchers for financial advice/guidance sessions to be redeemed with accredited partners.
■ In October the Treasury announced that it was considering the voucher scheme, in a financial guidance paper published alongside the FAMR consultation.
■ The voucher system was first floated by the PFS following last year’s Budget.
shirin.aguiar@ft.com