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PFS: Advice role in pension freedoms risks being overlooked

PFS: Advice role in pension freedoms risks being overlooked

Concentration on a “solution-based approach” and codifying generic guidance means the government risks overlooking the “vital” role advisers are set to play in the post-April at-retirement market, Keith Richards said today (11 February).

Speaking at a Thesis asset management conference in Southampton Mr Richards, chief executive of the Personal Finance Society, warned the industry “not to get too hung up” on the broader issue of the pension freedoms and their implications.

He said: “I just say to every member of the profession: don’t get too hung up on it. Your role is vital.

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“Unfortunately governments have a different view to regulators and that is that when you give people the freedom to make their own choices, some will inevitably do the wrong thing.”

Mr Richards pointed out that the government knew there would be “unintended consequences” from the move to open up access to pensions, but that it remains more concerned about a “solutions-based” approach for the public.

He stressed the PFS’s biggest concern was making sure the advice profession gets that recognition that it is playing probably the most vital role in the market that will emerge.

The role of advisers in the market post-April has been a key topic of debate amid concern over poor decisions by individuals and perceptions of an advice ‘gap’ affecting many prospective mainstream clients.

Treasury attention has focused on the Pension Wise guidance guarantee, although the Financial Conduct Authority has sought to ensure that those delivering this service and providers are referring to professional advice where appropriate.

Elsewhere, Mr Richards acknowledged that the advice sector was an established profession in a state of evolution, referring to FCA technical specialist Rory Percival’s earlier address to the same conference.

He said: “Rory mentioned earlier that he accepts the regulator accepts that it is a profession, that he supports the move to professionalism. We assert that it is a profession in a state of further evolution and there is a fundamental difference there.”

Additional reporting by Ashley Wassall