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Pica to amend annuity directory following ‘anti-advice’ criticism

The Pensions Income Choice Association has agreed to change the way a new directory of annuity brokers describes advised services following claims it creates an anti-advice bias.

The ‘Pick-A’ directory, which launched this week, is designed to provide a “shop window” for regulated retirement specialists to promote their services to savers across the UK.

However, advisers claimed the directory’s description of advised and non-advised services will encourage users to opt for a non-advised broker.

In particular, advisers pointed to a section of the site which suggests advice “can be more complex and time consuming” than guidance while suggesting non-advised brokers “put you in the driving seat”.

Pica chairman and Hargreaves Lansdown head of pensions research Tom McPhail says the phrase “complex and time consuming” will now be removed from the site, while the description of the benefits of non-advised services will be “toned down”.

He says: “I have had helpful feedback from a number of advisers this morning and, in the short-term, we have agreed to some specific changes.

“We are deleting the line that says advice can be more complex and time consuming than receiving guidance. In addition, on the guidance section we are removing the line which says guided brokers “put you in the driving seat” and modifying it to say they “give you the information you need and explain anything that isn’t clear, but leave the decision making to you.”

“So we are toning down the virtues of guidance and removing some of the criticism of advice.”

Pica is also looking to address issues around the indicative costs displayed on the directory. For some brokers, these costs are currently listed as £0.

McPhail says: “This is down to the quality of the data cleansing on the initial registration process. We are addressing that but we don’t yet know how long it will take to fix that problem.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Garbage in… garbage out? None of this helps restore trust in the advisor community and merely adds to the confusion. Surely investors want honest answers not just the neat simple ones…much like we would all like honest answers from our politicians however unpalatable the answers may be. This constant delusion life is lived in some sort of straight line vacuum with easy peasy solutions is rather strange. Investors need to be reminded that life is full of risks, advisers and planners are making sensible (hopefully) guesses (assumptions) about the future that need reviewing. Life expectancy, tax rates, inflation, health, investment returns, blah blah… no reasonable person expects an adviser to know the future and be able to guarantee the result perfectly. Therefore understanding requirements and assumptions is pretty vital, which means having a proper dialogue with the adviser. So yes a proper assessment is likely to be “complex”, life often is… and its also going to take time…(is anything worthwhile achieved quickly?). I would suggest that most advisers only offer three kinds of service: Good, Cheap and Fast, but you can only pick 2. Good service cheap won’t be fast; Good service fast won’t be cheap and Fast service cheap wont be good…

  2. We can all tell someone else how things should be better and i dont want to rip this site to pieces on the first day, but i think there a couple of obvious problems immediately. Firstly, the difference between advised and non-advised should be made considerably clearer and in fact i think they should be 2 completely different sections. and secondly the way they have asked for ‘average fees’ that would be charged for services is wrong. We have registered but haven’t completed the process as i wanted to see what others would put in this section and i can see some have been fair and others have been less than fair, for example ‘what is your average fee for annuities between £35K and £75K?’ – these figures may be wrong but the range is similar – well our fee for a £35K annuity is very different than for a £75K annuity. Most people appear to have put down the lower fee but when you put in your ‘pot’ as being £75K the people who have put in £4K dont seem as reasonable as those who have put in £600!

    Very good site and I wish them all the best and hope this works out, but I will certainly be reviewing our (average) fee structure as it will appear on the site.

    Also think there is some work to be done on the listings. Are people really going to trawl through pages of bland descriptions to get to the one they want or are they going to phone the one that comes at the top?

    This has the potential to work but needs to work out what it is trying to do before it turns into another marketing exercise for non-advised sales companies or companies that look the cheapest – more info and better calculations on fees would be better and give the client a better idea of what they are going to get.

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