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Hargreaves blasts ‘patronising’ Consumer Panel over non-advised drawdown

Hargreaves Lansdown has hit out at the “patronising and wrong” Financial Services Consumer Panel for raising the alarm about non-advised drawdown sales.

At the Taxation of Pensions Bill committee hearings this week, FSCP member Teresa Fritz warned MPs that using drawdown without advice from next April is a “big area of concern”.

Fritz said there was a danger consumers would mistakenly believe they had taken advice and have no recourse for redress over inappropriate product choices.

She said: “The big area of concern is the growth of non-advised streams. It was worrying enough with just annuities but is more worrying with complex products like income drawdown.”

Hargreaves Lansdown already offers non-advised drawdown. Head of pensions research Tom McPhail says the FSCP position is “simplistic”, “patronising” and “very counter-productive”.

He says: “There is a risk about sweeping generalisations. I did not recognize the FSCP’s characterisation of drawdown as a complex product that should only be sold with advice. Its presumption that no one is clever enough to look after their own money is both patronising and wrong.

“At one level it is no different to drawing money out of an Isa. I worry the FSCP fundamentally does not understand this market by making these comments. The FCA position is much more measured and considered.”

At the same parliamentary session the FCA said drawdown was “unlikley to be suitable” for pension pots under £50,000 but recognised the market would evolve.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. A wholly predictable though very definite minority view.

  2. I can see both sides of the argument and as with most things it is not black and white.

    On the one hand people do need advice but on the other hand there are some people who can make sensible decisions themselves.

    I have said in the past that issue is not necessarily whether someone has advice or not, but is whether that person has the right customer journey

    There are examples of good and bad customer journeys in both advice and no advice propositions.

    As an industry we need to work out how we give clients / customers the best possible experience because I am not sure we have not always done this well in the past.

  3. Surely the issue is not whether or not someone gets advice, that is up to the individual, but more whether or not someone thinks they are getting advice.

    The ability to enter drawdown without advice is fine provided that the client knows that they are going down that route. As Billy mentioned, it is not a black or white area.

    In my opinion, Hargreaves are one of the companies that are guilty of leading clients to believe that they are getting advice when they are getting nothing of the sort. Maybe that explains Tom’s vocal position.

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