The Personal Finance Society (PFS) has set up a pensions advice taskforce which will develop a voluntary pension freedoms advice code.
The goal of the group, which includes former pensions minister Sir Steve Webb, now director of policy at Royal London, and former Financial Conduct Authority (FCA) technical specialist Rory Percival, is to provide “strategic leadership and a voluntary code of professional standards for pension advice”.
Keith Richards, PFS chief executive, argued the taskforce's main focus will be “to create a common set of professional standards, encourage the sharing of good practice and provide a code of conduct that gives clear guidance in areas of ambiguity for everyone involved in retirement planning”.
He said: “The sector is predominantly made up of small firms, who are often not in a position to benchmark themselves against the wider market.
“Consequently, we have been liaising with the government and the regulator to facilitate alignment and unity on key issues to produce the best possible consumer outcomes at all times.
“We are also seeking to ensure that the unintended consequences of pension freedoms do not unfairly impact the advice profession at a future point.”
The taskforce, which will have bi-monthly meetings going forward, also includes Margaret Snowdon, chair of the Pensions Administration Standards Association, Simon Chrystal, chief executive of Workplace Solutions, Sue Lewis, chair of FCA’s consumer panel, Michelle Cracknell, chief executive of The Pensions Advisory Service, and specialists/professional indemnity (PI) insurers from across the sector.
Mr Richards argued that demand for professional advice “continues to grow in the wake of pension freedoms, coupled with the evident financial planning needs of an aging demographic”.
However, “some of the resultant unintended consequences highlighted in part by the British Steel Pension Scheme [BSPS] fiasco demonstrate just how quickly public trust and sector reputation can be impacted”.
FTAdviser reported in November that several steelworkers appeared to be transferring out their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth.
The firm, the first one to be stripped of its transfer permissions, has now entered into liquidation.
Steelworkers were given until 22 December to decide whether to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, to be moved to the lifeboat Pension Protection Fund.
The scheme has about 130,000 members of which 43,000 are deferred, meaning transferring out of their pension was an option for them.
Mr Richards added: “We want to play a greater role in protecting the interests of both the profession and the public.
“The taskforce has already started to develop a voluntary pension freedoms advice code, which will be made available to the public to provide greater transparency about what to expect from advisers.”
Sir Steve argued “most advisers want to do more than simply comply with the regulatory minimum requirements and value examples of best practice”.