Chris Hill, chief executive of Hargreaves Lansdown, has tackled the government over a regulatory regime that allows advice or guidance but nothing between.
Mr Hill said Hargreaves Lansdown encountered a growing number of employers who are keen to assist their employees with their financial wellbeing but his organisation’s hands were tied from helping them by current regulation.
At the Boring Money conference last week, Mr Hill said: “We see a number of employers now care a lot more about the financial welfare of their employees.
"With the introduction of the Lifetime Isa we now see companies thinking beyond auto-enrolment and thinking about that option as well.
"As things get ever more complicated, you mention guidance and not advice.
"With the Financial Advice Market Review there was a lot of talk about guidance rather than advice.
"We for one would love to help a lot more people engage with their savings but the regulatory environment is very much geared towards advice. It doesn’t allow us to have that sort of conversation.
"What role do you think the Department for Work & Pensions can play in engaging with that debate so when people ask us questions we can really, really help?"
But rather than discuss whether a review of regulation was required to create a regulatory regime for advice with limited liability, Guy Opperman, under secretary of state for work and pensions, just said government was keen to clarify what is guidance compared with advice.
Mr Opperman said there had been a proper parliamentary cross party debate on what the nature of the single financial guidance body set to replace the Money Advice Service, Pension Wise and The Pensions Advisory Service, will be and what advice or guidance should constitute on an ongoing basis.
He said: “I would urge everybody to feed into this your views on what assistance the state should provide.
“At the moment it is probably best to describe that it is a guidance body rather than specific advice.”
Mr Hill’s confrontation with Mr Opperman came after earlier this year advisers expressed frustration at the Financial Conduct Authority’s failure to provide universal rules of thumb to allow them to assist people to achieve a better outcome than if they tried to navigate pension freedoms alone.
The lack of such rules means advisers have to offer full advice or guidance, with no middle ground in which to operate.
At the Association of British Insurers’ Long Term Savings conference back in July, Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: "Unless we give everyone personalised recommendations [advising] doesn’t stack up.
"But we can’t give them the kind of guidance [listing universal rules] that we would want to. We are still hamstrung at a regulatory level from giving people the information they need."
emma.hughes@ft.com
