Personal Pension 

Apfa backs Mas to offer ‘guidance guarantee’

The Money Advice Service and the Pensions Advisory Service are the best organisations to deliver the ‘impartial, face to face, guidance guarantee’ promised in the Budget, the Association of Professional Advisers has said.

In its response to the Treasury’s consultation, Apfa praised the offer of guidance, but warned there is a “vital role” to be played by regulated advisers.

Chris Hannant, Apfa director general, highlighted that guidance can provide people with an understanding of the products available and the tax implications of different options, but “it cannot provide specific or tailored recommendations”.

There has been much discussion on how the guidance itself can be delivered, after the chancellor promised in this year’s Budget that everyone would have ‘face to face advice’.

Apfa is of the view that consumers need to decide how they want their ‘guarantee’ delivered, meaning guidance should be available online, by telephone and face-to-face.

It added that Mas and Tpas were best placed to deliver the service, and in particular highlighted a proposal from the former to launch a retirement advice directory as evidence of necessary signposting to full advice.

Mr Hannant said: “We believe Mas and TPAS are the best organisations to deliver the guidance, as they already have the relevant infrastructure in place.

“But guidance will not be enough for many consumers. Those in complex situations or with pots of more than around £30,000 are likely to benefit from regulated advice to get the best outcomes from their pension savings.

“To ensure there is an effective hand-off from guidance to advice, there needs to be a directory of advisers. This should be created using funding from the £20m set aside by the government for this project.

“Mas has proposed to create and operate this directory, and Apfa has been working with Mas to consider how to maximise sign-up among advisers and determine what information consumers will need.”

However, Apfa does not support Mas’s suggestion of setting additional standards for advisers that wish to join the directory.

Mr Hannant said: “Standards for regulated advice are already very high following the implementation of [the Retail Distribution Review], and advisers are well used to providing pensions advice.

“Any further conditions would make the directory unattractive for advisers so take-up would be low and consumer choice would be reduced.”

Just Retirement also separately stated in its response to the consultation that the guarantee should be completely independent of providers to ensure it offers impartial, personalised information.

The enhanced annuity provider, which has been hit in the wake of the Budget changes, flagged up recent research among MPs which found that only 4 per cent thought pension providers were best placed to provide the ‘guidance guarantee’.

Stephen Lowe, Just Retirement’s group external affairs and customer insight director, said: “Given providers cannot meet the impartiality test in delivering the service themselves, we believe outsourcing the service to an independent utility provider would best serve consumers.”