Gaps in the pension advice process have been identified as a growing opportunity for the intermediary community by a couple of industry experts.
During a seminar at today’s (17 September) Financial Service Expo London, former PMS executive chairman John Malone stated that potentially there will be more people cashing in their annuities next year than there are first-time buyers buying, second-steppers buying and people taking out equity release mortgages.
“This represents a huge, huge opportunity for the industry. One of the problems we have at the moment is - who gives the advice?
“The answer is not clear, which means there are opportunities to be explored.”
Michelle Cracknell, chief executive of the Pensions Advisory Service, agreed that people are being required, because of their provider or under regulatory guidance, to go and get financial advice.
“This kind of undermines the real value attached to the advice process as essentially people are being told to do it rather than really appreciate just how much it can benefit them.
“Importantly, when people are looking for this kind of advice they are also struggling to find advisers who will take on the cases.”
She gave a couple of reasons for this - one of which being that sometimes the cases are very small and advisers have the right to say they are not within their business model, adding that at the moment there is no good matching service between customers and advisers.
“I think we, as an industry, really need to work on improving this to try and bridge this advice gap,” Ms Cracknell added.
Also revealed at the conference was the fact that Tpas expects to receive around 150,000 pension-related enquires in 2015/16 in light of a continued lack of understanding over new pension reforms and heightened media attention.
Ms Cracknell explained that in 2013/14 they looked after 76,000 customers, rising to 103,000 in 2014/15.
“There was an unprecedented number of enquiries in August; last year we dealt with 320 calls per day; this year was just short of 400 calls per day. If we carry on this way we believe we will look after about 150,000 customers over the course of 2015/16.”