It was a week of scrutiny over past sales which haven’t worked out for the clients and continued simmering debates over the ‘guidance guarantee’, including the confirmation from Steve Webb that compulsion was not being considered.
Here we round up the 10 issues advisers should be aware from the week in news.
1. The devil remains in the detail.
Our two most read stories of the week on FTAdviser involved separate complaints over the down-the-line consequences of past sales of protection and equity release.
The first case involves a family which has claimed it faces ‘ruin’ because Scottish Widows critical illness policies have failed to pay out on a non-fatal heart attack. In the latter a woman faces eviction from the house her father, now in care, took an equity release loan against a few years before he was diagnosed with dementia.
Complex cases both; and the failure of an ombudsman claim in the former is at least perhaps instructive. It seems to me that both seem to rest on contractual provisions rather than anything malicious, proving that as always, the devil really is in the detail.
2. No compulsion protection under pension freedoms.
A growing area of discord in the pension freedoms debates is what will be done to prevent low take-up of the critical guidance to help people make informed rather than irresponsible decisions.
Crucially, this week Steve Webb made it clear during a committee hearing in the House of Commons that the government will not make taking guidance mandatory in a ‘tick-box’ fashion, and that instead it hopes to catalyse engaging signposting on the part of providers.
This could be important: according to one survey published today, around three-quarters of advisers think some clients at least will just cash-in their savings next April. But then, who cares what advisers think? Apparently not those consulting on the changes.
3. Providers are seeking adviser partnerships.
Some providers do not think guidance is enough, with Royal London becoming the first from the supply side of the industry to announce it is seeking to offer its clients more formal advice, by partnering with simplified online services to distribute services at discounted rates. By all accounts it won’t be the last.
Such simpler services are the talk of the town - and one such purveyor, Money on Toast, has announced it is rolling out a white-label version of its service for advisers to use with mainstream clients. Expect more of this sort of thing in the coming months.
4. Annuities set for platform boost.
The many advisers that have said they still see annuities having a place in the market, will like this one: a service enabling the quoting and purchasing of annuity policies is set to be rolled out to other operators, after a successful pilot with Nucleus. Pension freedoms really are moving things along apace.
5. The sun is going down on commission, but not advisers.
Away from pensions, there has been much concern voiced among advisers of the threat posed by the effective end of much trail commission when the sunset clause for platform rebates ends the bundled payments from which much of this ongoing income stream is paid.