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Are George Osborne’s guidance plans unravelling?


In his Budget speech, Chancellor George Osborne pledged  “free, impartial, face-to-face advice” to underpin his radical retirement reforms.

A few weeks later and it’s clear the service won’t be free, may not be impartial, probably won’t be face-to-face in the vast majority of cases and definitely won’t be advice.

Zero out of four is pretty poor going. With less than a year until they are introduced, Osborne’s plans are looking alarmingly flaky and we explore these concerns in this week’s lead story in Money Marketing.

We understand the Treasury is assuming the “guidance guarantee” will cost between £70 and £100 per person, or £50m a year in pension firm levies, which will inevitably be passed on to clients. The ABI says annual costs of £120m are not an unreasonable estimate. 

Insurers are at odds over whether they should be allowed to offer the guidance themselves, with at least two threatening to leave the ABI

It is very hard to see how the service can claim to be impartial if it is offered by firms looking to sell their own products off the back of it.

Chancellor unconcerned over confusion

Osborne told MPs last week he wasn’t worried about the confusion he caused by branding his guidance plans “advice”, saying the average person is not bothered about such technical definitions.

However, the reason people are precious about the word “advice” is that it comes with specific benefits to the client and responsibilities for the adviser. 


A personalised recommendation based on individual suitability, with the right to complain if you believe the advice to be negligent, is not something Osborne’s service will offer and it is wrong to blur these lines. The Chancellor’s dismissive response to MPs’ concerns on this point does not bode well.

FCA wake-up call on charges

Elsewhere in this week’s issue, we analyse the FCA’s “wake-up call” to advisers and wealth managers about the way they present their advice charges.

The large percentage of firms failing in this area does raise questions over the way the regulator has communicated what is required but advisers have been left in no doubt they need to heed this latest warning.

Steve Webb: The great reformer?

For someone who spent so much time in opposition demanding greater annuity flexibility and a larger, simpler state pension, Steve Webb may be feeling pretty good about what he’s helped achieve in Government. 

This week we hear from the pensions minister about how much credit he’s trying to take for the Budget reforms and why “this was the moment”.

Paul McMillan is group editor at Money Marketing- follow him on twitter here


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