Maps conducted research 18 months ago that showed that only 13.5 per cent of customers took providers up on the offer to book Pension Wise appointments. Out of those, 80 per cent kept their appointment.
The stronger nudge is delivered at the point the customer has already decided what to do with their benefits. If it was delivered at an earlier stage – maybe at age 50 – it may be more effective. But under the current rules, at the time the nudge is given many customers will have already made up their minds what they want to do and may only want the payment of funds to be completed promptly. They will probably not be interested in halting the process to take guidance.
So, where do we go from here?
The WPC recommends trialling auto-enrolment into guidance appointments, where members can opt out if they want. However, I disagree with this.
Pension Wise offers an important source of guidance, but it should not be seen as the panacea for all poorly thought-through pension decisions. Instead, there is a need to acknowledge the role providers play in giving information and help to non-advised investors, and the extent to which regulation facilitates or obstructs that process.
At the moment, companies are reluctant to even go close to the regulatory ‘perimeter’ between advice and guidance for fear of straying over it. We now have the opportunity through the FCA’s Consumer Duty initiative to re-examine this boundary and allow providers to offer good timely guidance to non-advised customers making tough decisions.
Rachel Vahey is head of policy development at AJ Bell
