In less than two years, we should have dashboards up and running that will deliver unparalleled information to consumers about their pensions.
Unfortunately, due to the actions of the Association of British Insurers, it now looks likely advice firms will be excluded access to such a great new service.
This would be a nightmare for the future of financial advice. Yet it is a very real situation being faced if the plans recently announced by the ABI are not changed.
Pages 84 and 85 (of 86) in its document “Reconnecting people with their pensions” state: “In the mid-term, a number of technical solutions may be found that will allow for delegate/proxy access for a third party, once the consumer has provided consent. Any delegated access proposal would need to be acceptable to stakeholders from a legal and data security perspective.”
Translated into English, this means the interim phase of the pension dashboard project – led by the ABI, without oversight from HM Treasury or the Independents Treasury previously put in place – proposes for the medium-term that, while the new single guidance body will offer a dashboard and be able to advise consumers on their pensions, as will providers, consumers wanting to share the information with an IFA will have to print it off and do so manually.
The argument for such restrictions comes from the Department for Work and Pensions’ insistence that any dashboard including state benefits must meet the security standard known as L0A2.
In the last six months, however, Origo has produced a white paper with OiX to demonstrate how this could be achieved. It has not just explored how the DWP requirements can be met but has also built a service that can put this into practice.
If Origo can build a service capable of supporting advisers using dashboards, why is the ABI excluding them? It strikes me as exactly the kind of thing you would do if you wanted to undermine the role of advisers in the digital world.
But not only will this hurt advisers, it will do serious damage to many of its own members.
How would business consultants from firms offering dashboards without adviser access be received? Could they really expect advisers to recommend clients invest with them? I expect they would have difficulty even getting meetings in. Why would an advice firm send business to a company that would then deliberately cut them out of the relationship with the client? Nothing infuriates advisers more than life companies trying to cut them out. Now the ABI is advocating a course that will make this normal practice, at least for the next few years.
If dashboards proceed as currently proposed by the ABI, it will seriously damage business relationships between advisers and insurers who are members.
While this may be very beneficial for companies like Aegon and Legal & General which have been wise enough to leave the ABI in recent years, as well as non-life company platforms, it is a situation we should all work hard to avoid.
In producing this report, the ABI has proven it is not a fit, impartial or reliable party to progress the pension dashboard project and must be removed from its current role. The proposals are a disaster waiting to happen. They must be rejected.
Chief executives of ABI firms who remain committed to dealing with advisers should come out urgently and condemn its failure to recognise the important role they will play in helping clients understand the dashboards.
In addition, firms that wish for the ongoing support of advisers should commit to adviser delegated access being a part of any dashboard they deliver from day one.
Ian McKenna is director of the Finance & Technology Research Centre