Cross party politicians and the influential industry leaders have signed a joint letter calling on the Government and the FSA to address the risk a post-RDR advice gap could pose for people with small pension pots.
The open letter, drafted by ILC-UK chief executive Baroness Sally Greengross (pictured) and sent to Mark Hoban, Steve Webb and Lord Adair Turner, calls on ministers and the regulator to convene an urgent ‘retirement incomes summit’ to address the issue.
The letter has been signed by 16 people including Lord John McFall, Frank Field MP, NAPF chief executive Joanne Segars, Aifa policy director Chris Hannant and Money Marketing editor Paul McMillan.
Greengross says: “The status quo in financial advice is not sustainable. Trust in financial advice is paramount and this will only improve with a more transparent charging structure and stronger rules to ensure the independence of advice.
“But the unintended consequences of the RDR could reduce access to advice for people with small pension pots. We need to place a greater emphasis on the quantity of advice as well as the quality of advice.”
ILC-UK has produced a white paper outlining possible solutions to the problem. These include a call for clarity on the distinction between the provision of information and advice, restoring a concern over the quantity of financial advice to the RDR process and publishing open market option take-up by wealth cohort in order to improve transparency.
Partnership has supported the ILC in producing the white paper.
Partnership chief executive Steve Groves says: “The key changes brought by the RDR are to be welcomed.
“A transparent, professional advice market is in everyone’s interest. However they risk creating an ‘advice apartheid’ unless there is greater clarity on what is information rather than advice and the processes to access financial products are simplified.”