The Money Advice Service is looking to launch a retirement adviser directory as it admits that it has not signposted to advisers well enough in the past.
To be considered for inclusion advice firms will have to be able to show they specialise in retirement advice and agree to take clients no matter how small their pension pots.
MAS published a consultation on the plan this morning and if it goes ahead the criteria for inclusion will be decided by a panel of industry and consumer representatives. But MAS also wants to develop a way of comparing what advisers will charge so those using the service can compare advice firms on cost. The service will be in place by April 2015.
Speaking to Money Marketing, MAS chief executive Caroline Rookes says website content will also be revised to better indicate to users when they may need regulated advice.
She says: “We feel we have not explained to people the circumstances when regulated advice is worth having and the protections and costs that might come with it and we should make that clearer. This would be a directory of advisers who specifically deal with retirement, that are prepared to deal with people no matter how small the funds and where it is easy for people to make comparisons between advisers.”
Apfa director general Chris Hannant says the directory is necessary and that improvements in handing users of the service over to regulated advisers is welcome.
He adds it is important advisers can indicate they only want to deal with certain sorts of customers. “It will mean a wider choice of firms on the datbase but it may mean certain types of customer the choice of firm is more restricted,” he says.
“Because advisers have different ways of charging I am not sure you can just choose one metric. They should be able to describe their pricing structure in their way and people can then work out how that applies to them.”
Rookes admits coming up with a “standard format” for comparing adviser charges will be a “big ask”. “We will need to work out a way that can be simplified and compared, and that is part of the consultation,” she says.
MPs have criticised the MAS for duplicating the work of existing bodies and there are already other adviser directories like Unbiased and Vouchedfor as well as Pick-A, which provides details of retirement advisers and costs.
The Pensions Income Choice Association agreed in January to change the way its directory described advised services.
In March’s Budget, Chancellor George Osborne announced that from next April people would be able to take their entire pension pot aged 55 and that they would get “free, impartial face to face” guidance when they came to retirement.
Last week, Money Marketing revealed Government is looking to give providers a role in delivering the guidance guarantee.
Rookes says this would be “more complicated” than a fully independent body delivering it but if the job was handed to providers they would find a way of doing it.
She adds: “I cannot believe we won’t have a role of some sort. Even if the guidance guarantee is given to providers we would still provide our guidance because that’s what we do.”
Rookes says guidance will only tell people the “choices” they have to make and that this directory will give whoever ends up providing the guidance somewhere to send people if it looks like they need regulated advice.
She says: “This directory is just the start. It may be once this is all in place and if we see it is effective we might look at other parts of the market.”
Caroline Rookes: In her own words
On the retirement adviser directory:
“It will be a directory of advisers that are in consumers’ area, that cover retirement. It will provide them with advice face-to-face or via a webchat and they can see what the charges are.”
On not coming under Freedom of Information Act:
“I wasn’t aware of that. We are pretty transparent in what we do. I am not aware we have hidden anything from you.”
On the upcoming independent review of MAS:
“I do not think it will be a stay of execution. I do not think there is any question that we will cease to exist. The review will confirm the importance of the role we have and the progress we have made in delivering against it.”
On providers giving pensions guidance:
“There are ways of doing it to ensure the guidance is impartial but obviously the picture is much more complicated because they are selling products. If they were given a job to do they would find ways of doing it.”
“We will pay bonuses where people exceed their targets and objectives. We have had a very good year so I imagine we will pay some.”