PensionsJun 3 2016

Advisers should have been in pension dashboard talks

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Advisers should have been in pension dashboard talks

The failure of a group leading the development of the pension dashboard to ask advisers to contribute to its recent white paper on the issue, will result in an inferior, uncompetitive product, according to fintech experts.

A working group of 14 organisations recently released a white paper proposing a model for the pensions dashboard that would allow members to view all their pension pots on a single website.

The group is comprised of Nest, ABI, Altus Business Systems, Aviva, B&CE, Barclays, Cabinet Office, EY, HSBC, LV, Origo, The Pensions Advisory Service, Standard Life under the auspices of the Money Advice Service - but no advice firms.

“If you look at the list of companies involved, there was one part of the industry that was notably absent; there wasn’t a single adviser,” stated Ian McKenna, director of the Finance and Technology Research Centre.

“Given that 90 per cent of products are distributed through advisers, surely it would be important to have advisers on board.”

The white paper proposed building a single, centralised data aggregator that pension providers would be able to white label on their website. But Mr McKenna pointed out that by failing to consult advisers, they would miss out on some of the “much better” technology already used by IFA firms.

“It will be like riding a pedal cycle rather than driving a top of the range Mercedes,” he argued, adding the group was wrong to opt for a centralised data aggregator, which would be anti-competitive and likely to stifle innovation from fintech start-ups.

Mr McKenna also criticised the government for failing to make the dashboard compulsory.

“Compulsion is absolutely essential to making the pensions dashboard work. It should be compulsory for all pension providers, but market participants should be able to compete to offer the best solutions for consumers,” he said.

HM Treasury confirmed it had “no plans” to make the dashboard compulsory, but said the industry was widely supportive of the initiative regardless.

Will Lovegrove, chief executive of data transfer technology provider Pensionsync, agreed that creating a centralised data aggregator could stifle competition.

“They [the authors of the white paper] are proposing a central creation of roadways, but that would be a monopoly,” he commented, backing instead a government-controlled series of “data pipes”.

However, since a centralised system has been ruled that out by the Treasury, Mr Lovegrove said it would be better to leave it open to competition.

He added the recent white paper would be just one model among many. “Two or three ideas will come forward over the next three months.”

The Money Advice Service’s retirement and pensions strategy manager Jackie Spencer, who led the working group that produced the white paper, said adviser input would be welcome in the next stages of development.

“Membership of the working group was voluntary and open to any groups and organisations that wanted to participate,” she said.

“Throughout the project we were mindful of consumers sharing data to third parties like financial advisers. The next phase is again open to all organisations who are willing and able to participate.”

Neil Munford, a financial planner with Milestone Wealth Management, said he had not been aware of the initiative to build a pensions dashboard, and was sceptical of the viability of the project.

“It would be useful, but I can’t see it happening in the short-term.” He cited the technological and logistical challenges would require “everybody pulling in the same direction.”

But he said it was not an urgent issue for his clients, who rarely had pension pots they did not know about.

james.fernyhough@ft.com