The Treasury is loosening its grip on advice in the workplace in an effort to boost take-up of group personal pension and stakeholder schemes but concedes that the move could lead to more misselling.
The Treasury's two-year review of the Financial Services and Markets Act includes a reworking of regulation to improve accessibility and take-up of pension schemes.
It admits that the relaxation of the rules designed to protect employees from unsui-table advice from people who are not authorised or trained to give advice could cause more misselling but says this is a risk it is willing to take.
One of the proposals involves changing the rules for oral financial promotions which could enable employers to answer questions more freely in staff presentations and meetings.
The Treasury concedes the potential disadvantages of the changes, pointing to “the gap in consumer protection it leaves for the employee in the workplace and the increased risk of misselling”.
The proposals also make way for the Citizens' Advice Bureaux to play a bigger role in advice, extending its remit beyond giving generic fin-ancial advice to consumers.
The Government is concerned that consumers may be missing out on adequate advice but has made no moves to force CAB advisers to become qualified.
Scottish Life head of pensions Steve Bee says: “I really do not think you can brush something like this under the carpet. Pensions are not suitable investments for everyone in the workplace.
“If the products were intrinsically suitable, then we would not have a problem. If the Government is saying that careless distribution is acceptable, then this flies in the face of all we are trying to do.”