The industry is under no moral obligation to serve all sectors of the market, accor-ding to Barclays Financial Planning director Stephen Ingledew.
Speaking at the Centre for Future Studies Third Annual Conference on savings in London last week, Ingledew said it is uneconomic for businesses to provide quality, highly trained advisers to sell products such as Isas to mass-market customers.
Despite increasing calls for generic advice, Ingledew questioned who would pay for it, as the majority of advice is paid for by the customer through commission. He argued that customers taking generic advice would not be prepared to pay a fee.
He said: “Are we morally obliged to serve all corners of the market? No, we also have responsibilities to shareholders and policyholders. We cannot be all things to all people. If we go down that road, the industry will not be there for much longer.”
Ingledew also said most mass-market people under 40 would be better off paying off their debts rather than saving into a pension.
But Prudential director of UK policy development Tom Boardman said the industry needs to reinvent itself to serve the mass market.
He said: “I am not necessarily talking about the poorest people but maybe the 25,000-plus mass market. These people want to get firm recommendations and reassurance.”
Pension expert Ros Altmann argued that the lack of standardisation in the market, even for the most basic products, is causing confusion for people shopping around for products.
But Ingledew responded: “Not many people shop around. Isn’t it healthy that there is choice in the market rather than a Soviet-style regime where everything is the same.”