The launch of a user-friendly directory setting out how advisers and brokers can help the general public ensure they are getting the best out of their pension pot should be something to celebrate.
Unfortunately the Pension Income Choice Association’s new Pick-A website has been subject to a volley of criticism from advisers concerned that some of its wording is unfairly skewed to promote non-advised services at the expense of advisers.
To its credit, Pica has been quick to acknowledge the criticism and says it will be making some changes. For instance it will remove its description that advice can be “more complex and time consuming”. The positive descriptions of non-advised guidance will also be toned down. Overblown phrases, such as the suggestion that non-advised brokers “put you in the driving seat” will be removed.
A glitch in the directory search also means certain advised and non-advised services are listed as costing nothing when investors are looking to make price comparisons.
Pica chairman and Hargreaves Lansdown head of pensions research Tom McPhail blames the quality of data cleansing and cannot give an estimate as to when the problem will be fixed.
Price is only part of the consideration when deciding what do to with your pension pot but it is an important part and there should have been better checks on the quality of this data before launch.
Adviser concerns about non-advised bias are understandable and perhaps those who put together the directory should have been more alive to these sensitivities.
Worries about a lack of a level playing field between advice and guidance have been heightened by the regulator’s decision to ban commission for advised business through the RDR but leave non-advised firms to continue to be allowed to receive such payments.
The FCA will reveal the results of its annuity market investigations in the coming weeks. A ban on non-advised commission would be a welcome step alongside a greater focus on ensuring people are shopping around and not being funnelled into inferior annual income payments for life.
The Pica directory will hopefully become an important positive force to ensure more people are shopping around. But more work is required to ensure people can use the tool to make informed decisions about the type of intermediary they would like to deal with.