View more on these topics

Industry warns on ‘guidance’ definition post-Budget

The FCA will need to establish a regulatory definition of guidance services in the wake of the Budget, according to EY.

Chancellor George Osborne stunned the pensions industry in the Budget last month when he announced people would be able to take their entire pension pot as cash from age 55 from next April.

Alongside the reforms, Osborne said members of defined contribution schemes “will be offered free, impartial, face-to-face advice” at retirement from April 2015.

A consultation document published alongside the Budget confirms the service will provide guidance, not advice.

Speaking at a Tisa distribution event in London last week, EY insurance director Jason Whyte said: “If they want this to work they will have to have a firm definition of guidance. That is an interesting thing to be watching because one way or another we have to find out what the boundaries are.”

Intrinsic chief executive Richard Freeman said: “General adviser reaction to the Budget is positive. But I am very concerned about how the definition of guidance and advice end up.”

Freeman also raised concerns that the pension reforms outlined in the Budget risk future misselling scandals.

He said: “If we are not careful, there is a risk we get a misselling scandal in five or six years time, where pensioners come back and complain because they did not take an annuity.”

Towry chief executive Andrew Fisher agreed. He said: “While annuities are pretty bad products, they are better than third-hand Ferraris. I think the reforms are a bit reckless.” 

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Money “Advice” Service any-one ?

    Advice is advice until a complaint comes along, then it becomes guidance !!

    As we are aware ( or the FCA will have us believe) if its guidance then the consumer is responsible for there own decisions

    Technical bolt hole, that is as clear as mud

  2. I can feel a flow chart coming on!

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com