Mike Morrison: Advisory regime needs some radical change

A couple of Saturdays ago, and in a break from having a full weekend, I was asked to speak at the Retirement Money Show in London. As the show was in Westminster there was the added attraction of having an anti austerity demonstration and march just outside the conference hall.I gave a short talk on whether you should cash in your pension, and so had a good chance to speak about tax, scams and the need for financial advice. I then took part in a roundtable session where we took questions from the floor.With more than 600 people in the room it was a great chance to hear what an audience of potential consumers thought about some of the issues that make the news in the industry, and to perhaps see some of those issues from a different perspective.(As an aside, I would recommend one of these days for all parts of our industry – advisers, providers legislators and regulators. There was a captive audience of interested people, representing a good cross section of professionals, self-employed, a few just retired, some self investors, some people with advisers - some very cynical but others really just wanting to learn.) {desktop}{/desktop}{mobile}{/mobile}Other speakers during the day included Steve Webb, the ex-Pensions Minister, Paul Lewis from BBC’s Money box and Michelle Cracknell from TPAS and Pension Wise.The overwhelming feeling from a good number of the questions was that the new pension freedoms have been positively received and there appeared to be a real feeling of engagement with pensions and retirement – this has got to be a positive start!We then got onto a few of the issues. Problems around access to the new rules came up a number of times – whose fault was it and why were providers so slow? There was a small number of people wanting to take money out of their pension to invest in things that they could invest in via their pension.Buy-to-let was mentioned and firmly put in its place by a number of the speakers – tax yet again.We then got onto some of the nitty gritty; people wanting to transfer from DB schemes, insistent clients and FOS and the perceived cost of independent advice.I think that, for many, there was a feeling that the pension freedoms were promising one thing and offering another, but with a bit of explanation many of the perceived barriers were understood (if not totally accepted).So, what conclusions can I reach from all this? Well I do think that there is a bit of a gap between what clients want to hear from advisers and what advisers see as client objectives. This is emphasised by the fact that consumers are not totally convinced of the cost of financial advice.Interestingly, this coincides to some extent with the message I have had from advisers, in that they feel so constrained by regulation and the possibility of being found liable for past advice that they are naturally cautious and consequently may need to restrict the type of client that they take on!I think the current advisory regime needs some radical change – telling people that they need to get paid advice for particular things is a sure fire way of getting them to seek other ways of achieving that same goal, and in many of these cases contact with advisers can often be quite negative.The regime we need is one where value of and the need for financial advice is the key and where contact between parties is voluntary and is not clouded by over-complicated background noise.

Mike Morrison: Advisory regime needs some radical change

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