Responding to the consultation on the pension changes announced in the budget Broadstone Corporate Benefits [BROADSTONE], the independent pensions and investment expert, calls on the Government to put a monetary value on its commitment to providing retirement guidance to encourage prospective pensioners take up the offer.
Simon Nicol, Pension Director at Broadstone Corporate Benefits, comments:
“For face to face guidance to work – and stand the test of time - consumers will need to be convinced of its impartiality and worth It is clear that many may need persuading to take up the offer of guidance particularly if by being ‘free’ it appears to reduce its value. A method of doing so will be to increase its perceived worth by giving it a monetary value. This could be achieved by giving prospective pensioners a voucher of a certain value designed to cover the cost of the initial guidance meeting or that could be put towards the cost of full advice. Employers might also top up the voucher if they wished to offer more comprehensive advice for their staff. “Individuals should be free to choose from whom they take the guidance and spend their voucher; perhaps from an accredited list of providers or qualified IFAs. Costs could be met by the providers as currently proposed.”
An historic hangover from the commission model of financial advice is the misconception that advice is free. But that the free advice always comes with a sales pitch. Giving retirees a means of paying directly for the guidance might reassure and encourage those most needing it to take up the offer.
The closing date for responses to the consultation is 11 June 2014.