OpinionDec 7 2015

Insistent clients

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The problem of insistent clients rumbles on without any early resolution of what appears to be a basic issue in sight.

The issue can be summed up in a few words: regulated advisers do not want to give advice to clients who a few years later may claim they were misadvised.

And the Treasury and City regulator do not want to introduce a common sense intervention because they fear the bill for any mis-selling may land on their doorsteps.

But many of the ordinary Great British Public have a portfolio of pension pots, having had a number of jobs over the years, opting to become deferred members of one or more of these schemes than to risk putting all their savings with a single scheme sponsor.

This is a perfectly rational decision; with pensions freedoms, most people make an assessment of their collective retirement incomes and may decide, rightly, that one or two of the smaller pots, often below £30,000, could be cashed in to clear outstanding debt or to fund a long-treasured holiday.

Then they come up against professional advisers, who through fear, do not want to advise and leave the final decision to their clients.

But the role of the adviser is in the title, the same way that a doctor may recommend surgery but the patient does not have to agree; equally, a lawyer may advise, but the client does not have to agree; so too financial advisers.

There is a bogus argument that accompanies this reluctance to provide impartial advice based on the assumption that the public is ignorant of finances and have to be educated.

This is true to an extent, but everything is relative. Few of us know as much as we think we do.

The Treasury must work out a way of allowing people to access their savings. Otherwise the idea of pensions freedoms is anything but. If the chancellor fails to resolve this slight hiccup, what is one of the great post-war developments will become a damp squib.