View more on these topics

Ros Altmann: Govt bodies must promote value of advice

Ros AltmannA vital element of the new Single Financial Guidance Body’s role should be helping the public understand the difference between free, impartial guidance and expert, impartial advice, so consumers recognise the value added by professional financial advisers.

The new body merges three old consumer organisations: Pension Wise, the Money Advice Service and The Pensions Advisory Service.

None of these could give advice on savings or pensions but the public could easily be forgiven for not recognising the nuances.

The RDR has failed to support the value of truly independent advice and may have even added to confusion. Most people still seem to think advice should be free.

In other areas, paying for the skills and expertise of trained professionals is automatically accepted. It always astonishes me that no one would expect an architect to help them design their house extension, or a lawyer to conduct complex conveyancing, for free, but when it comes to financial affairs, people resent paying.

Will the Govt’s new guidance body live up to its promise?

In this regard, the SFGB’s stated purpose raises concerns. It lists five core functions: strategy, consumer protection, pensions guidance, money guidance and debt “advice”.

I tried unsuccessfully to change the latter to debt “counselling” or “guidance” but the term is apparently so embedded in charities and other bodies like the Citizens Advice Bureau that there was resistance to amending it. Such muddled thinking risks prolonging confusion. Indeed, the public are told this is a holistic service but, in the era of auto-enrolment, it cannot tell someone with large debts whether to opt out of their employer’s pension scheme.

An excellent team has been selected to head up the new guidance body. With Sir Hector Sants as chairman, John Govett as chief executive and Helen John as chief financial officer, I am hoping for great things. In particular, I hope they will not waste this golden opportunity to clarify the value of advice for consumers. Other concerns I have around the SFGB include the fact it is supposed to launch a non-commercial pensions dashboard this year.

This will be valuable but I fear it may use up much of its resources. The bad data problems must be addressed before a properly functioning dashboard can work reliably. I hope the SFGB leadership will raise this issue with regulators.

Another important change I would like to see is for the guidance body to be the first port of call for anyone thinking about taking money out of or transferring their pension. Added to the cold-calling ban, this would help better-protect consumers against scams.

Seeking guidance before engaging with their provider about possible options for their pensions can help people make better decisions, avoid expensive products and costly tax charges, and to realise why they should consider paying for independent expert advice.

Ros Altmann is former pensions minister



How much are advisers charging for pension transfers?

Defined benefit pension transfer charges are being put under the microscope again as the regulator turns over more potential conflicts of interest. With the British Steel Pension Scheme the latest to dominate headlines and the FCA ready to interrogate further as it extends its review to include all firms authorised to give pension transfer advice, […]


Govt unveils restrictions to pension credit for couples

The Department for Work and Pensions has announced it will limit access to pension credits for couples from May this year. The change was set out in a statement by pensions minister Guy Opperman yesterday. It will restrict pension credits for couples where both are not over state pension age which is currently 65 for […]

Trusts and Taxations

Take a look at the trusts and trustee taxation video – The definition and classification of trusts. Once you’ve viewed the boxset, visit our Test Centre to test your learning and get your CPD certificate. View here


News and expert analysis straight to your inbox

Sign up


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

  1. Well said Ros

    Thank you

  2. Hector finds another ‘Gravy Train’!! Unbelievable!!

  3. “An excellent team has been selected to head up the new guidance body. With Sir Hector Sants as chairman”

    Bang goes your credibility!

    • Pretty much my thoughts too!

      That aside, any national body promoting the benefits of seeking out and paying for advice from a suitably authorised firm or individual must first have confidence in the profession’s regulatory body and that, I suggest, the FCA is still a long way from commanding.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm