The pension advice process should be akin to the triage system used in hospital waiting rooms, matching consumers to their appropriate level, according to the former pensions minister Steve Webb.
Speaking to FTAdviser, the now Royal London director of policy commented that financial advice is clearly set to become far more important in the years to come.
He said: “Therefore, we should adopt a sort of triage approach, channelling people towards the level of advice or guidance that they can afford and about what they need.”
Picking up on previous comments about the Pension Wise guidance service put in place during his tenure as a solution to the thousands of people given their at-retirement freedoms on 6 April this year, Mr Webb said it was “necessary, but not sufficient”.
At a conference at the start of November, he admitted that Pension Wise had not got the coverage he hoped it would and wondered whether the money should have instead been spent on some form of “cheap advice” via a voucher system enabling consumers to see an actual IFA.
Mr Webb told FTAdviser that after the chancellor’s bombshell Budget last spring “something had to be done” in order to have a definitive place for information, filling that initial gap.
“The question is now what - do the government spend the same millions on more guidance, or do they spend it on some system which gets more people into proper financial advice?”
He also pointed out that a better use of time and money would be for the information gathered during an individual’s Pension Wise session to be fed to the adviser, should they choose that route.
Royal London is preparing its response to the Financial Advice Market Review and plans to tackle the related issues of insistent clients and automated advice, with Mr Webb stating that the former will certainly be part of the government’s changing remit for Pension Wise.
As for the latter, ‘robo-advice’ is clearly part of the answer in closing the advice gap, according to Mr Webb, although he was doubtful at this stage how far the machines would eat into the need for actual face to face discussions about complex retirement planning.
Now with an industry hat on, Mr Webb was critical of the government’s stance on the fabled ‘pension dashboard’, calling on politicians to “crack on” with plans to bring together people’s savings and investments in one online portal.
“I was disappointed that the government tried to farm that all back out to the industry. For it to work properly it needs to connect to state pension data as well as private provisions,” he added.
peter.walker@ft.com
