1st July 2015

Where have all the advisers gone?

There has been a lot of coverage in the press recently about the new pension freedoms and the so-called 'obstructions' being put in the way of customers trying to take advantage of those freedoms by providers, often including the requirement for 'expensive' advice from a financial adviser. Understandably there has been concern amongst the adviser community that such coverage damages the public's perception of the value of advice, focussing on its cost rather than the benefits.

In fact, we should almost certainly be more concerned about the availability of advice, rather than its cost.

This issue of the availability of advice has been highlighted by The Heath Report and is a key motivation for establishing the new adviser trade body Libertatem. It particularly pertinent in respect of the new pension freedoms. The Government has put in place Pension Wise to provide information and guidance to people considering taking their defined contribution benefits, but many of the people using this service (and by implication, those who aren't) need more than just information and guidance. They need advice and help on making a decision and the implementation thereof. However, for those with 'smaller pots', such advice is potentially not even available, leaving such people vulnerable to making bad decisions.

For example, given that in many cases some of the freedoms such as flexi-access are not available through their current pension arrangements, customers would have to transfer elsewhere to access them, but without advice, how do they go about this? Aside from customers' difficulty in assessing suitable products, many providers require a financial adviser to be involved when implementing a new product. So, the chances are, they may just stay with the options provided by their current provider. The paucity of accessible advice at this level is therefore potentially leading to poor customer outcomes that can have a huge effect on their well-being in retirement.

Libertatem is committed not just to promoting the value of advice, but also to protecting its continued availability to those consumers who need it.  It wants to stimulate growth of the adviser sector by restoring pride in the profession and brining sanity and joined-up thinking to the world of regulatory oversight.

More power to Libertatems's elbow for looking to keep these issues at the forefront of regulators' minds: one of a number of causes that merit adviser support through signing up for the new trade body.

Philip Moore

Director

Action Consulting (UK) Ltd

Regulation