The Association of British Insurers (ABI) has called for a ‘fundamental rethink’ of the boundary between advice and guidance after a survey found nearly three quarters of people would not pay to see an adviser.
A poll commissioned by the ABI asked 2,368 adults from across the UK about their attitude to pensions. It found that 72% would not pay for regulated advice.
Following the survey, the ABI has called for changes to regulations to make it easier for providers to offer cheaper guidance to consumers.
‘Changes are needed to shift the advice and guidance boundary and to 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 ABI said.
Results from the survey also showed that 46% of people would pay for one-off financial advice but just 12% would pay ongoing advice fees. Earlier this year the FCA raised concerns about the value of ongoing fees in its annual ‘Sector Views’ paper. It later said a review of suitability in advice would look at ongoing advice.
‘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,’ ABI director general Huw Evans said.
‘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 little help.
‘This is a shared responsibility for providers, regulators, advisers and government bodies. With the Brexit transition period coming to an end, the FCA 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.’