Pension dashboard branded RDR-level threat to advisers

Ian McKenna, director of the F&TRC, said the fact adviser access will not be made available to dashboard users at launch is going to have a "serious impact" on both traditional and digital advice firms.

Under plans unveiled on 12 October by the Association of British Insurers, financial advisers will not be able to access clients’ information by proxy in the initial pension dashboard.

The dashboard will allow information to be exported in some manner, but the consumer must be present to gain access to the data in the first place. This means advisers will only have access if they request the data from their clients.

Also, consumers won’t be able to change basic information or access pension charges and underlying investments in the initial dashboard.

Mr McKenna stated: "Not allowing advisers delegated access at launch is undermining the whole adviser-client relationship. In fact, I believe it is as much a threat to advisers as the Retail Distribution Review (RDR) was."

Advisers were forced to dramatically overhaul their business practices in the run up to higher standards, a ban on commission and stricter definitions of independence being introduced in December 2012 under the RDR. Adviser numbers are down significantly since then, from around 40,566 at the end of 2011 to around 24,761 in May this year.

Mr McKenna said the current plans could also leave retirement savers at risk of making bad decisions because they did not have advice at the point of use.

This was bitterly ironic, Mr McKenna suggested, considering the dashboard came out of the Financial Advice Market Review - which aims to improve consumers' access to financial advice. 

Mr McKenna said: "This is bad for the consumer, bad for the adviser and bad for fintech.

"Pension scammers will do very well out of it. We need to be protecting the consumer, not exposing them to potential issues".

Earlier this month, Origo, working with O&M Systems, developed and demonstrated a form of delegated access to help advisers access their client's dashboard through a secure delegated authority, which was also compliant with the incoming General Data Protection Regulation.

We are aware that a technology solution is available to enable delegated access within the government’s digital ID solution, but the government would need to be satisfied with it and ready to implement it. Rob Yuille

Paul Pettit, managing director of Origo, said: “Not only is our base technology ready for 2019 deadline, we have taken the additional step to develop delegated authority for financial advisers and guidance bodies. Consumer engagement and access to advice is crucial to improved retirement planning.

"Enabling the adviser community to provide much needed advice can only help ensure better outcomes for consumers."

According to Mr Pettit, the dashboard should help springboard individuals into taking independent advice.

He added: "The project has the potential to not only significantly improve retirement planning, but also financial inclusion and consumer engagement with the pensions industry. This is what makes it an important and exciting initiative for the UK consumer and for the industry.

"Once consumers have access to their individual dashboard, confirming the location and value of their pension pots, many are likely to seek advice as part of their retirement strategy."

This follows the publication two weeks ago of the ABI's 86-page document, the Pensions Dashboard Project: Reconnecting people with their pensions.  

At the time, Mr McKenna and others warned about potential for problems if users are not allowed to give their advisers access to their pensions data. 

Peter Bradshaw, national accounts director for Selectapension, commented: "There could be an issue if demand for the dashboard rockets and is not matched by the supply of advice or guidance, so the industry needs to consider how that demand might be met."

Another potential issue is whether there will be a stand-off between consumers and the providers and insurers when it comes to ownership of personal data. 

The document, in Appendix 9, page 84-85, stated: "Consumers may wish to allow another party to have access to their information, for example a financial adviser or a family member.

"Minimum viable product requirements allow for information to be able to be exported in some manner but the consumer must be present to gain access to the information in the first place.

"In the mid-term, a number of technical solutions maybe found that will allow for delegate/proxy access for a third party, once the consumer has provided consent.

"Any delegated access proposal would need to be acceptable to stakeholders from a legal and data security perspective."

Mr McKenna said: "The fact there is this mention of 'stakeholders' - by which we read 'providers and insurers' - begs the question 'whose data is it anyway'?

"It should be the customer's data, to share with whom they want. But if a 'stakeholder' wants control over this data, then it means the consumer does not have control over their own data.

"I believe the ABI has misunderstood the consequences of this."

The ABI has been spearheading the dashboard project, on behalf of HM Treasury. On 19th October, the Department for Work and Pensions announced it would be taking over from the Treasury to deliver the dashboard on time.

Rob Yuille, ABI head of retirement policy, said the ABI would "like to see" delegated access available at launch, but the organisation did not believe the launch of the dashboard should be held back because of it.

He commented: "The project is a complex but vital piece of consumer work and is a concept which has the full support of the government, after its decision last week to take the project forward.

"Improving access to advice and guidance is critical – we want more people to use advice, we support the recommendations of the FAMR, including introduction of a pensions dashboard. It is critical that pensions dashboard users have access to advice and guidance to help them make good decisions and avoid pension scams, which is why security is such an important consideration."

According to Mr Yuille, if the industry wants the dashboard to include the state pension, this will require "a digital identity solution that satisfies DWP and government more widely".

He added: "We are aware that a technology solution is available to enable delegated access within the government’s digital ID solution, but the government would need to be satisfied with it and ready to implement it."

In response to the comment made by Mr McKenna about whose data it is anyway, Mr Yuille said: "The report sets out the minimum viable product; we would like to see delegated access available at launch, but we do not agree that the dashboard should only go ahead if it is available.

"In any case, we would expect many customers to share their results with an adviser, or to find their pensions with an adviser present. In the process, we spoke to IFA firms, via individual interviews and events, including some organised by industry bodies and trade publications."

Find out more

To understand more of the pros and cons of the dashboard, read FTAdviser's Guide to the Pension Dashboard, which qualifies for 60 minutes' worth of structured CPD.

simoney.kyriakou@ft.com