Commenting on the report Malcolm McLean, Senior Consultant at Barnett Waddingham said: "The report makes some very interesting and potentially far reaching recommendations about changes to the current advice and guidance regimes, which I think we all agree are not currently always working in the best interests of consumers.
"Disappointingly as far as I can see, the review doesn’t take us any further in ensuring that consumers fully understand the difference between guidance and advice although it does call for the definition of regulated advice to always include a personal recommendation from the adviser – something I have always believed was an inherent part and outcome of any quality adviceservice anyway.
"In relation to the problem of encouraging consumers to pay for advice - something which has probably increased as a barrier since the Retail Distribution Review (RDR) - the report suggests that those nearing retirement age should be allowed to access their pension pots early (i.e. under age 55) to pay for that advice. Whether that will make a significant difference is debatable but it is probably worth a try.
"Where the review does score in my view is the clear support and backing it gives to the use of new technology to help make financial advice more affordable for millions of consumers. The FCA is to set up a new advice unit to help financial firms to develop automated programmes to deliver 'robo-advice'. Although this is unlikely to actually be advice as such it will allow consumers to go on-line, answer some questions, and receive financial help without having to pay for individually tailored solutions – all of which should be positive and will help consumers to better understand the issues and what their next steps should be.
"Overall in my view the review has clearly recognised many of the barriers that exist in ensuring that consumers get the necessary support in their pension planning and has come up with some useful pointers to the changes that need to be made and the possible ways forward. As ever the proof of the pudding will be in the eating and whether in due course the quality and take-up of guidance and advice improves significantly and consumers are in a better place as a result."
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