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Harrison finds room for advice

Positive Solutions executive chairman David Harrison believes only 50 additional basis points on a recurring income basis would be needed to create room for IFAs to advise on personal pension accounts.

Harrison, speaking at the Money Marketing/Cicero pension summit in London last week, warned the Government that it risks consigning people to the wastebin by offering only generic advice on the NPSS.

He said that by excluding advisers from the NPSS debate, the Government had failed to deploy their expertise in knowing why and how people save.

He said: “We can do it and we want to do it. The Government could pay us to advise on NPSS. I am paying £3m per year in regulatory fees, so getting some money back would be very helpful.”

Harrison also hit back at the widespread perception that advisers are only interested in selling to rich people and pointed out that IFAs sell more stakeholder products than anyone else. He said that there was no evidence that people were put off saving by higher charges.

But Which? principal public affairs officer Emma Higginson said: “There is no role for IFAs – people on low to mid incomes are already excluded from the pension market. We need generic advice from a Personal Accounts board.”

Harrison said: “You are putting these people into the wastebin. People need four or five hours with an adviser to help make such an important life decision.

“It annoys me that Which? is perpetuating this quagmire to sell its magazine. This is the middle class speaking on behalf of everyone else.”

John Lawson, Standard Life head of pensions policy, said: “The means testing and state pension systems make it far too complex to explain through generic advice.”

But IMA chief executive Richard Saunders said “Independent advice for 10 million people in the NPSS is just not practical. Are we really saying that each IFA should take on 400 clients each as a public service?”

Aifa deputy director-general Fay Goddard said: “People should have access to advice rather than it being imposed on them. There should be a facility for people to speak to an IFA, particularly on optout issues.”

MAIN POINTS

l Government wrong to exclude IFAs from NPSS debate

l 50 additional basis points would create room for advice

l IFAs not just interested in dealing with rich. Those on low incomes are more in need of advice

l Generic advice not sufficient on NPSS

l No evidence that charges deter low and mid income savers

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