Consumers taking their money under the pension freedoms without advice should be given a month ‘cooling off’ period while they take guidance, national advice firm LEBC argues.
The firm has expressed concerns that consumers may not fully recognise the need for sustainable income management and the implications of withdrawal rates as they become aware of the benefits of exercising freedoms.
Responding to the FCA’s work on the pension freedoms, LEBC said it has “called for those who have not taken regulated advice (30 per cent of those exercising pension freedoms) to be given a 30 day cooling off period and referred to a guidance service to give them pause to reflect on their decision before it is too late to reverse it.”
LEBC director of public policy Kay Ingram notes that many advisers will offer initial consultations for these clients without charging a fee.
She says: “Ideally a fixed fee for the second stage of advice should be charged, regardless of the outcome of the advice, that ensures impartiality on the part of the adviser.”