Pensions dashboard transparency is a double-edged sword and may change consumer behaviour when introduced, a consultant has warned.
Independent pensions consultant Billy Burrows commented: "Will the dashboard will change customer behaviour?
"Transparency is a double edged sword as when people get it it can be a little bit scary for them. While it is right that customers can go and see the value of their pension pots, the question is, when they see it what will they do?"
Mr Burrows said it would be important for the development of the pension dashboard services, a prototype of which has already been created, spearheaded by the Association of British Insurers (ABI), for there to be more information around context, values and information.
"I think there should be some totally independent guides provided. Another thing that will be important is making sure this information links well with financial advisers.
I appreciate pension freedoms, but this does not mean the freedom to go and blow the whole lot as soon as you can. Billy Burrows"I get the impression so far that advisers may not be able to get direct access, only the clients, and so the client will have to take a copy and send it to the IFA, although this is being worked on."
Mr Burrows hailed the concept of a dashboard, as it could "cut out a lot of the donkey work in in bringing together all the different pot values into one place", but said pensions advisers were right to wonder whether this will encourage people to bypass the advisers and manage their pots themselves.
He added: "You might not want to give the IFA access to the whole dashboard, just to some of the funds but for my money's worth I think as a client you should be able to empower your IFA to look at all the information on the dashboard.
"This is obviously a hard ask with all the security issues involved there, but in an ideal world the IFA could be the agent and work on the client's behalf, so that people use the information available sensibly and wisely.
"I want to be clear: I appreciate pension freedoms, but this does not mean the freedom to go and blow the whole lot as soon as you can."
Philip Brown, head of policy for LV=, commented: "The pensions dashboard will undoubtedly give consumers a clearer understanding of all their holdings in one place, which could encourage them to take action to lead more comfortable lives in retirement.
"But we believe the regulators should encourage pension providers to at least send customers standardised annual pension summaries that show what their savings could provide.
"This could help people's understanding of what their retirement income could be, and allow them to take action if necessary."
The comments come as FTAdviser has produced a comprehensive guide to the pensions dashboard.
The guide qualifies for 60 minutes' worth of structured CPD.
simoney.kyriakou@ft.com
