Pica’s new website launched to enable consumers to find at-retirement help has been promoted as a balanced guide to identify companies that can help them access the best solution to their retirement problems.
Governments, marketing men and even our regulator use the ‘nudge’ principle to move people in the direction they want, and to subtly change behaviour. Sadly, the approach Pick-A looks to be using is to nudge consumers towards its preferred outcome.
Pica sounds like an industry body. You would hope and expect it to be representative of the industry, but is it?
Ros Altmann, in her blog, has highlighted the disparity of the original language used on the site. Opting for a guided service was described positively with words such as:
- ‘helpful’, ‘comfortable’, ‘explain everything’, ‘all the information you need’, ‘highly qualified’, ‘put you in the driving seat’, ‘less expensive’.
But when it comes to advice, the words used were negative:
- ‘complex’, ‘time-consuming’, ‘ask you questions about your finances’, ‘appropriate qualifications’, ‘have to charge you a fee’, ‘more expensive’.
The nudge on price is less subtle. The claims that advice “may be more expensive than choosing a guided solution”, while accurate, nudges clients to what Pica wants them to think, i.e. advice = cost. Balanced? Or is this the spin of those wishing to push execution-only sales and earn sales commission?
Sadly PR for the advice business is more dissipated, less organised and less effective.
So what of qualifications? Everyone working in an advised business knows that to offer advice, qualifications are needed. Here’s what the directory says about a non-advised ‘guidance’ approach:
- Firms offering ‘guidance’ don’t have to comply with the same standards, but some do. That means it’s often the case that you’ll be dealing with someone as highly qualified as an adviser.
This is incredible. Is the spin used to make this comment backed by research? Is this balanced? Perhaps each firm represented should have to disclose how qualified each of their ‘guiders’ or advisers are.
And finally when you get a range of companies who can offer guidance or advice, how have the indicative costs been validated? Many seem fanciful. My research produced a company offering a nil charge. Really?
Some seem to want to give Pica the benefit of the doubt, suggesting this is a valiant attempt to provide an impartial directory, but I don’t. This is a cynical attempt to appear balanced whilst manipulating consumers towards commission-based execution-only sales.
After initial feedback from advisers some of the most biased lines have been toned down. Perhaps if Pica had a willingness to interact with the advice market a more balanced approach would be achieved. Advisers need to be vigilant about wolves in sheep’s clothing, as Pica appears to be running with the wolves.
Alan Mellor is managing director at Phillip Bates & Co Financial Services