Consumer dutyApr 13 2023

Richards: Industry 'needs to address' pre-retirement planning

Search supported by
Richards: Industry 'needs to address' pre-retirement planning
(Carmen Reichman/FTAdviser)

The lack of pre-retirement planning in the UK is a big concern and should be addressed alongside the consumer duty, Keith Richards has said.

“[IFAs and] financial planners have, in recent years, been more focused on those who are approaching, at or in retirement, whereas actually in past years all the focus was on the accumulation phase,” the CEO of the Consumer Duty Alliance and former CEO of the Personal Finance Society told FTAdviser.

“It is something that we need to address.”

This will be something that, along with a number of other issues, will be the focus for the pensions advice taskforce, which Richards said earlier this week (April 11) will be reformed.

We need collaboration if we want to make a differenceKeith Richards, Consumer Duty Alliance

The taskforce was first created in the aftermath of the British Steel closure, and brought together representatives from across the pensions industry.

Members of the original taskforce included former pensions minister Steve Webb, and representatives of the Financial Conduct Authority and The Pensions Regulator which sat on the steering group as independent technical observers.

It created a set of principles that underpin good financial advice and adviser behaviour that exceeds minimum requirements and is therefore more likely to deliver consistently good consumer outcomes.

Margaret Snowdon has been confirmed as the chair of the taskforce, with other members to be confirmed in due course.

Richards said the whole point of the taskforce is that it has experts from across the sector.

“We have got to look at ways in which we encourage easier access and greater confidence in [financial] markets. We have got to work with policymakers, we cannot do it on our own,” he said.

“It always sounds a bit self-fulfilling when the market tries to engender trust when you have got a regulator that keeps exposing poor practice…it is pointless.”

The taskforce will work with policymakers and regulators to try to collectively work out the right solution that engages consumers in a more meaningful way.

We have got to tackle these issues that stand in the way of consumer outcomesKeith Richards, Consumer Duty Alliance

“We need collaboration if we want to make a difference,” Richards said.

It is also good timing for a “reset”, he said, given the incoming consumer duty.

“The consumer duty arguably is what was around before regulation was introduced, most firms passionately believe that everything they do is around their duty to their clients”, he said.

“Rather than looking at this as a regulatory reform, this is a good opportunity for the market to start to work more collaboratively to take more of the lead in how to drive standards and drive better outcomes.”

If, in the process of this, more consumers have more trust in the sector, that’s not a bad thing, he said.

Richards focused on the impact scandals have on the wider brand of the sector.

“In other sectors, things go wrong but it does not stop people [from using them].”

One big issue is the increasing amount of financial fraud and scams that are sweeping the UK, he said.

“We have to learn to work with policy makers to start to re-engage with consumers [and encourage them to] go to regulated firms, and not be left susceptible to scams who are deliberately out there to defraud them.

“We have got to tackle these issues that stand in the way of consumer outcomes.”