Recognition in the Budget of the need for impartial advice was positive for consumers, given the challenges of making the right choices as a result of the reforms.
The Personal Finance Society responded to the FCA’s pre-Budget review of the annuity market by proposing a National Retirement Advice Service to provide universal access to impartial guidance at retirement.
Most people facing the task of turning their retirement funds into a sustainable income are ill-equipped to make such vital decisions without expert advice.
In the past, annuities of some kind have been the solution, and they are likely to remain a key consideration in the foreseeable future as they remain the one financial product to guarantee a specified level of income for life.
Encouraging consumers to shop around is a positive thing, but only if they know what they are looking for. So, paradoxically, greater freedom of choice has simply added to the complexity of making the right decision.
A National Retirement Advice Service would offer a range of direct support, including affordable access to expert advice through a network of qualified advisers and the potential to introduce a fully-funded voucher system funded by redistribution of approximately 15 per cent of 2013 regulatory fines.
The service would dovetail with the Money Advice Service and the Pension Advisory Service in broad collaboration with other government bodies, the FCA, the pensions industry (ABI) and the advice profession.
This has the potential to change perception of the role and value of professional advice in general.
Keith Richards is chief executive of the Personal Finance Society