After the significant changes in retirement planning outlined in the chancellor’s Budget, we have now received the full details of the ‘guidance’ planned for retirees from 2015.
The key is the use of the word ‘guidance’ rather than ‘advice’. It is planned to provide guidance, within set parameters, from organisations such as the Money Advice Service and The Pensions Advisory Service to outline the options available to clients and the way that they could approach retirement.
No individual products or solutions, it appears, will be provided other than to detail the options available to you.
It is interesting that the planned cost of this service will be partly borne by the current advisory industry, almost robbing Peter to pay Paul.
As the FCA notes on pages 6 and 11 of its paper, the guidance does not replace financial advice given by regulated advisers and “would be better handled by an authorised independent financial adviser (IFA)”.
My concern is that the guidance offered may lead individuals to make decisions that are not suited to their circumstances, and although there is a planned complaints procedure, the consultation paper seems to offer the possibility of only limited financial recourse. This is not the case with true advice.
We will respond to the FCA’s paper, and while we applaud the plan to raise awareness of retirement options, the way it is applied may lead to much unnecessary confusion.
Keith Churchouse is director at Chapters Financial
