The government has announced the introduction of a new single financial services guidance body working directly with consumers. The as-yet unnamed body is intended to provide a more joined-up approach to helping consumers understand their financial needs and will replace the Money Advice Service, the Pensions Advisory Service and Pension Wise.
Superficially, this sounds entirely sensible, especially as it will mean an end to the Money Advice Service, an organisation doomed from the outset, and Pension Wise, which never made much of an impact. In essence, both organisations have proved costly mistakes and have potentially misled consumers.
This announcement grows more worrying when we hear that one of the objectives mentioned by pensions minister Richard Harrington is that the Government is “committed to ensuring people can access the best free and impartial financial guidance possible”.
Guidance can obviously be provided free of charge to consumers, but someone, somewhere has to pay for it; past experience tells me it is likely to be us.
Why on earth does the government not realise that the solution for helping consumers already exists?
Today’s advisers are the one group of professionals who consistently receive lower numbers of complaints than any other section of the financial services market.
Equally, they are constantly monitored by the regulator to ensure the advice they provide is impartial and they are already recognised by the government as delivering a valuable service to clients.
Indeed, the last Budget introduced an important measure to encourage access to financial advisers via a pension fund payment for pre-retirement planning.
I once again urge the government to consider providing consumers with vouchers to give them access to good quality financial advice rather than all the inevitable costs this new super-guidance body will incur.
The RDR demanded a lot of advisers in return for an improvement in consumer perception of our professionalism and a supposed regulatory dividend.
It is time for the government to fully acknowledge the value of personal professional financial advice, and recognise that advisers deliver the best impartial financial guidance and advice available for the mutual benefit of all concerned.
Ken Davy is chairman of SimplyBiz