Rethink call as customers demand free financial advice
Customers want free advice
Financial advice needs to change says an industry leader as evidence emerges that most people are not prepared to pay for it.
Nearly three-quarters (72%) of those surveyed by the Association of British Insurers wanted free advice.
At today’s ABI conference Future-proofing the pension freedoms: what next? director general, Huw Evans, will call for a fundamental rethink of the regulatory environment to facilitate new forms of advice and guidance so it is fit for purpose for the next 15 years.
This will enable customers to get advice that it is simpler and more affordable, or guidance that offers more help. Currently, the financial guidance pension providers can give to consumers is limited.
The research reveals that consumers have mixed views on how they want to receive financial guidance, suggesting there needs to be a range of options available to suit individual needs.
The most popular option for accessing information was through a Government website (29%) followed by pension provider (25%), family (23%), online information (22%) and Pension Wise (21%).
The past five years have seen major changes to the long-term savings market, not least with the introduction of the pension freedoms which opened up a range of new opportunities for customers.
Mr Evans said: “With millions of people exercising unprecedented freedoms to make retirement choices, we need a system of guidance and advice that helps the majority, not a minority.
“When people have saved all their working lives for their retirement, it is not good enough to allow most of them to make complicated judgements about drawdown rates, annuity options and pension options with very limited help.
“This is a shared responsibility for providers, regulators, advisers and government bodies.
“With the Brexit transition period coming to an end, the FCA [Financial Conduct Authority] has a uniquely timed opportunity to devise a system suitable for UK pension freedoms that ensures the majority of savers have access to either guidance or advice as they take decisions that will shape the rest of their lives.’