The government is considering introducing a voucher system – like a form of financial legal aid – to help consumers pay for financial guidance.
HM Treasury is consulting on the future of its financial guidance services that could involve rationalising the entire set-up.
A 41-page paper, Public Financial Guidance: Consultation, said the government wanted to consider a more joined-up approach to its service, which is currently delivered by three organisations. This has led to the Treasury asking for ideas on how it can run the service differently.
The document said: “A possible model might be a government-backed voucher scheme whereby a consumer could be provided with one or multiple vouchers for financial guidance sessions that could be redeemed with a range of accredited partners.”
The idea of the government using vouchers to give people access to a couple of meetings with a financial adviser – rather than generic guidance – is one that has already been floated by the Personal Finance Society.
The government’s public financial guidance is currently provided by Mas, The Pensions Advisory Service and Pension Wise, which is itself provided by Citizens Advice and The Pensions Advisory Service.
Kevin Burge, Pension Wise team leader at Tpas, said a form of government subsidy on advice was “a fair point”. Mr Burge said: “This is under consultation, and certainly it has been put back on the table, but we will have to see what comes out of the various consultations.”
According to Keith Richards, chief executive of the PFS, this has been something mooted previously by the PFS, whose proposal was based on a voucher system for advice funded by a re-distribution of a relatively small percentage of regulatory fines.
Mr Richards said: “Part of our proposal included the creation of a ‘focused’ regulated advice process to better address retirement needs and expectations of the public. This would potentially help to increase access to qualified advisers and reduce cost rather than forcing a full review every time. The option to expand into full advice, based on the client’s individual needs, would of course remain a key feature though rather than signposting the client elsewhere.”
Regardless of the outcome of the Financial Advice Market Review, the government has said it is committed to providing public financial guidance that involves free pensions guidance and debt advice - although the government has said it is open to the idea of other services being provided.
The government is also looking into whether the accountability of these services, currently split between the Treasury and the department for work and pensions, should be changed.
Mel Kenny, a financial adviser with London-based Radcliffe & Newlands, said: “Anything giving people a level of advice that’s got a bit more depth to it than what Pension Wise could offer has to be a better outcome.”