The Government rejected a recommendation from an expert panel to assemble a more comprehensive finance dashboard as part of the Financial Advice Market Review.
Speaking at an Aviva roundtable debate this week, Defaqto insight consultant Gill Cardy, who sat on the FAMR panel chaired by Scottish Widows chairman Nick Prettejohn, said the proposal was markedly broader than the pensions-focused offering eventually backed by Chancellor George Osborne in the last Budget.
She said: “We said there should just be a financial dashboard that included everything – because why stop at pensions?
‘If you’re going to go to all the bother and employ the technology to put a pensions dashboard together, how difficult could it be to add some other stuff?”
Cardy added: “Financial resilience starts early, and if you haven’t got things like your house insurance, your car insurance, your mortgage or your personal loans sorted out efficiently, you end up with not enough money to do other things.
“But we have ended up being in a little channel where it’s all about taking your pension, so it’s all about regulated advice instead of taking in a much broader scope.”
Comparing the potential tool to “Experian on steroids”, she suggests that the Government could even go as far as incorporating tools like the MiData project, which allows consumers to compare the performance of current accounts using their own spending data.
Cardy explained: “Then you have a portable fact-find that is seriously meaningful, throughout people’s lives. It would be a shame if we allowed it to only be about pensions. There needs to be two strands that happen, and include educating a whole new generation about the importance of making all the right decisions with your money.”
However, The Pensions Advisory Service chief executive Michelle Cracknell stressed that significant technical challenges exist even for the dashboard in its current form.
She said: “Let’s just focus on finding customers pensions’ to start with. We can’t even always do that today.”
Nonetheless, Cracknell added that a broader Government strategy for improving financial capability could take a similar tactic, making better use of data to create nudge points for people around their finances.
She compared the suggestion to information provided to new mothers and suggested the Government contact people after a divorce, when they buy their first home or when they pass their driving test.
Cracknell said: “Why aren’t we using all these opportunities to nudge people around their life events? Getting people to deal with an overall financial plan all in one go can be just too much, but we can chunk it up into much more manageable pieces.”
Tisa policy director Adrian Boulding added that a more fundamental effort is required to help consumers better understand financial services.
Boulding said that when Tisa collaborated with the Building Societies Association and the British Bankers’ Association to produce a leaflet on the new Flexible Isa, the trade bodies were still unable to distil the information sufficiently.
He said: “It took six pages to explain the rules. The idea that the consumer is going to invest that much of their life to read through six pages – probably twice just to understand it – is unrealistic. So we are going to have to make this whole thing far more engaging. As an industry, we have a long way to go to get them sufficiently interested that they dial up their own accounts, and then after that we should look at dashboards, and hopefully we can meet somewhere in the middle.”