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MAS considers extending retirement directory to all advisers

The Money Advice Service has confirmed plans to go ahead with an adviser directory but will now consider whether it should include all advisers and not just retirement specialists.

In its consultation on the plan, published in June, the MAS said to be included in the directory firms will have to show they specialise in retirement advice and agree to take clients no matter how small their pension pots.

It said a panel of industry and consumer representatives would decide the final criteria for inclusion in the directory.

At the time, Apfa said MAS was veering into “dangerous” territory by setting its own standards for which firms are qualified to give retirement advice.

In its response to the consultation, published today, the MAS says the panel will be asked to consider whether the directory should include all regulated financial advisers or just those specialising in retirement advice.

It says final entry criteria will be decided by the panel but its intention in suggesting there should be entry criteria is to “differentiate this directory from others in the market and to instill consumer confidence in the directory”.

The MAS will invite 13 organisations to be part of the panel, including Apfa, the Personal Finance Society, the Institute of Financial Planning, Citizens Advice, The Pensions Advisory Services and the Society of Later Life Advisers.

Despite Apfa’s initial criticism, director general Chris Hannant says he welcomes the proposal for an “impartial and effective directory” because it will form part of the “handover” from the Government’s pension guidance to regulated advice.

He adds: ”We will work with the service to ensure that the directory’s criteria are effective in delivering this, and helps link consumers that need advice to those that are capable of delivering it.”

The MAS says it intends to include information on advisers’ fees in the directory. However, it says further work will be needed and the information may not be included in the first iteration of the directory, but added at a later date.

The service is due to be in place by April 2015, to coincide with the launch of the Government’s at retirement guidance service announced in the Budget.

The MAS says a new consumer interface, where consumers can search for an adviser and view advisers’ details, will be built and hosted within its existing site.

It will now investigate whether this should be outsourced or developed in-house, but says that either way it will be responsible for determining the user journey and site content.

Data management and verification of the service, as well as ongoing maintenance, will be outsourced. The MAS will now undertake a public procurement exercise to find a suitable supplier.

Respondents to the consultation highlighted a number of potential risks associated with the directory, including adding to the confusion among consumers as numerous other directories already exist, high costs associated with getting the service right, and inadequate maintenance.

The MAS says these are all “valid concerns” which will be kept under review.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. In light of the revolutionary pension changes there should be a new exam for retirement advice and advisers who pass the exam should be eligible to give advice to those people mentioned by the chancellor in his budget – a multiple choice online exam for advisers who already have J04 and J05 or equivalent. Customers qualifying for the free advice should be given vouchers worth £150 for a consultation with a qualified IFA.

  2. This is important that MAS does this as they guide people who need advice to a regulated person or company. Otherwise the unregulated market will boom on the back of this by offering ‘free reviews’ and ‘free advice’. In our web based society where people expect too much for free you can see the appeal of the scams offer. Joe average does not know any diffirent. Hence the most inexperienced with finance are victims waiting to happen and MAS need to protect them.

  3. So at the speed such bodies work, is it realistic (in any event) that this, or should that be which) scheme will be up and running especially by next April?

    It sounds like another NHS IT department job in the making!

  4. Here is the feedback we gave on behalf of our members – albeit accepting that full and truly scientific research had NOT been carried out. The above decision therefore looks like good news to us and appears that the cautions and views put forward have been listened to by MAS.

    “Many thanks for the opportunity to contribute. The following comments won’t all meet with what I feel you were looking for but are constructively meant and I hope can be accepted in this manner.

    Consultation Question 1:
    Do you agree there is a need to improve the customer journey towards regulated
    financial advice? – Absolutely yes.

    Consultation Question 2:
    Do you agree any new directory should also include details of advisers who specialise in the
    post-retirement advice market? – The directory should be ‘permission’ based only i.e. anyone who is qualified / authorised should be listed. Those wishing to state their specialisms should be able to do so.

    Consultation Question 3:
    Do you agree that a new retirement adviser directory might provide a solution for
    consumers needing regulated retirement advice? – Yes if you consider retirement in isolation. However… an ‘overall’ directory that is properly signposted (e.g. to retirement experts, to investment experts etc.) may, overall, have more benefit while still serving the ‘retirement’ focus purpose.

    Consultation Question 4:
    Do you agree that information regarding fees should be included in the directory? – Certainly but in a way that just allows firms to describe their structure. Comparisons could mislead rather than help

    Consultation Question 5:
    If so, do you have any views as to how this might be presented to consumers? For example,
    should there be a ‘menu’ or list of services with average or approximate costs given for
    each service? – See above

    Consultation Question 6:
    As well as contact details, qualifications and expertise, type of service offered and fees
    charged is there any other information you think the directory should include on the adviser
    firm or individual advisers? – Needs to be interactive. Enquiries need to be trackable so none ‘fall off a cliff’.

    Consultation Question 7:
    Do you agree that an independent panel should decide upon the entry criteria for the
    adviser directory? – No. Just permission based with the ability for each firm to provide information about themselves, what they offer and their fee structure. Those who wish to stand out as specialists need to be able to

    Consultation Question 8:
    Do you agree that the main consumer and adviser professional bodies should be invited to
    join the independent panel? If so, can you suggest the particular bodies you feel should be
    invited to be members of the panel? – Just permission based please or it will be over complicated and potentially will limit choice for consumers. Must NOT create a whole administrative can of worms. Keep simple.

    Consultation Question 9:
    Do you agree that the Money Advice Service should host the directory? – Not clear what is meant by ‘host’

    Consultation Question 10:
    If not, is there another organisation you feel should host the directory? – cherry or anyone could, with proper access to FCA register data

    Consultation Question 11:
    Do you agree that data management and verification plus on-going maintenance should be
    outsourced to a suitable organisation and paid for by the host organisation? – Verification re fitness to be listed needs to be via the FCA register data. Thereafter, for additional data, this could be outsourced

    Consultation Question 12:
    Do you have any suggestions as to which organisations should be invited to tender for the
    data management and verification services? – organisations that already have the building blocks in place so that all expense to MAS / advisers is minimised

    Consultation Question 13:
    Are there any other benefits to consumers or advisers in establishing a new directory? – More benefit to be gained by adapting one that already exists or it is just re-inventing the wheel

    Consultation Question 14:
    Are there any disadvantages of establishing a new directory that we have not envisaged? – Whatever is done could, if mishandled, cost an awful lot of money – and then someone else could, in theory, come along, do something better and cheaper anyway. Hence…. need to keep it simple and get it right first as last

    Best regards

    Donna Hopton”

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