News
14 March 2016, 00:00
Encouraging steps to make advice available for all says Saga Investment Services on FCA response to Financial Advice Market Review
• Clarity on the differences between ‘guidance and ‘advice’ will benefit all consumers
• Early access to pension to pay for advice can transform people’s retirement planning
Commenting on the FCA’s response to the Financial Services Market Review, Gareth Shaw, head of consumer affairs at Saga Investment Services, said:
“Saga Investment Services welcomes the FCA’s response to the Financial Advice Market Review (FAMR). For too long, large parts of society have not had access to the help they need to plan their finances properly and make the most of their money, whatever their situation. Given the continuous changes to retirement savings in recent years, help is now needed more than ever.
“Giving consumers the opportunity to access their pension savings early to pay for advice can transform the way that people plan their retirement. Saga research found that just 6% of over 50s have used a financial adviser since the pension freedoms were introduced, while many over 50s cite the biggest reason for not taking advice is that they do not think they have enough to qualify for it.
“Giving people more flexible ways to pay for professional advice – including the proposal to encourage paying by instalments and accessing advice through the workplace – can help give people the confidence to access the services they need. It is also good to see the application of behavioural economics to prompt people to take advice and stimulate demand.
“The report has recommended the introduction of a ‘pensions dashboard’ by 2019, something Saga called for in its response to FAMR. This timeline should be sped up – three years is too long for people to get the full picture of their retirement finances in one place. The Government must also play a key role in this, opening up data to pull in state pension, which is a vital part of someone’s retirement income.
“More could be done for consumers to understand the cost of advice. The FCA should strengthen its rules around adviser charging and disclosure, making it mandatory for advisory firms to publish their charges in an easily-accessible and standardised format, which can be provided to consumers through every channel.
“This would empower consumers by giving them the ability to properly shop around for advice and to compare the cost of different services. This change could also motivate advisory firms to find innovative ways of demonstrating the value of their services, and enhance existing comparison services.”