Pension Dashboard  

Pension dashboard could cut cost of advice by £400

Pension dashboard could cut cost of advice by £400

National advice firm LEBC has calculated that opening up access to financial advisers of the planned pension dashboard will cut the cost of advice by up to £400.

The firm's director of public policy, Kay Ingram, told FTAdviser allowing access to an adviser nominated by the consumer would also make advice more accessible and promote real consumer engagement.

She said: "Advice costs are higher than they need to be due to the difficulty which IFAs have in accessing accurate, thorough information from pension schemes and providers.

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"The dashboard, if detailed enough, could cut the cost of advice delivery and save the consumer between £300 to £400 per [pension] scheme in fees and speed up the delivery of advice, which can take months due to poor, incomplete information being available."

The cost saving to the client would be in the initial consultation phase, and would vary from person to person, depending upon the number and type of pensions they have, Ms Ingram added.

The plan behind the pension dashboard, which is due to be launched in 2019, is to create the technology to enable savers to see all of their retirement pots in one place at the same time, giving them a greater awareness of their assets and how to plan for their retirement.

However, according to a report published in October by the Association of British Insurers (ABI), advisers will not be able to access clients' information by proxy in the initial pension dashboard.

According to the ABI, this "product does not need to include all the possible functionality at launch, and adding too much extra functionality would add significant risks to meeting a planned 2019 timescale".

Nevertheless, Fintech company Origo has already developed a way for financial advisers to access a client's pension dashboard.

Ms Ingram argued that if the access to the pension dashboard is shared by the consumer, the guidance service and a regulated adviser nominated by the consumer, "it will enable all parties to see the same information, for the professionals to interpret it for the consumer consistently, and make action, rather than good intentions, happen."

She added: "There are costs savings for the pension providers and scheme trustees to be gained, with those savings being redirected to the provision of scheme benefits."

Ms Ingram also said that allowing access to financial advisers would help against illegal criminal activity.

She said: "Guidance staff and regulated advisers could each have a Pin (linked to the [Financial Conduct Authority] FCA register), which could be activated, once client consent is given, opening up the dashboard information for them.

"This would help consumers to safeguard their information from scammers."

According to the chair of the Pensions Administration Standards Association (PASA), Margaret Snowdon, pension savers have lost more than £1bn to scams.

William Burrows, retirement director at Better Retirement, said it is true that a significant cost included in the advice fee is for administration, and it can be difficult to get the correct information quickly from insurance companies.