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'Advisers' key role must be stressed by new version of MAS'
The new financial guidance body set to replace The Money Advice Service must put consumers directly in touch with qualified advisers, a pensions firm says.
Yesterday, the Government confirmed plans to create a single organisation to replace MAS, The Pensions Advisory Service and Pension Wise.
Andrew Pennie, head of pathways at Intelligent Pensions, said that the main requirement to improve what these existing bodies have done is to direct them to regulated advisers.
He said: “The government free guidance service is necessary and can certainly help people with very basic needs. Where I would really like to see the service extend and improve is in directing people to regulated advice where the need is identified.
“This must go beyond simply telling people they need to seek advice, as people then struggle to identify a suitable adviser, and must actually put people directly in touch with a qualified and suitable adviser to tackle the advice need.”
Mr Pennie also warned the Government it should not “lose sight of the fact there is already plenty of guidance available from employers, pension providers and countless websites”.
He said: “Unfortunately, guidance can only tell someone what they could do rather than regulated advice which can tell people what they should do.
“In addition, with guidance the receiver must proceed at their own risk but with regulated advice, the recipient benefits from full regulatory protection and should the advice be wrong and lead to financial loss, they would have a right to financial recourse.”
Steven Cameron, pensions director at Aegon, echoed the need for consumers to be finding regulated advice. He said: “The government’s decision to bring together all public financial guidance within a single body should make consumer access easier.
“For many individuals, ‘free’ public guidance will add value, but for others with more complex needs, it’s no replacement for regulated advice. It’s vital that the new body complements and doesn’t compete with valuable regulated advice services with effective signposting and handovers in place that work for consumers.”
Tom Selby, senior analyst at AJ Bell, said: “Financial guidance, particularly in relation to pensions, has become increasingly disjointed, with three major levy-funded organisations operating in the pensions space. The Government has now recognised this approach is inefficient and potentially confusing for savers.
“Moving to a single guidance body should reduce the costs paid by the industry – and ultimately by consumers who buy products and services – and create a simpler system.
“Information and guidance, in partnership with regulated financial advice, have a vital role to play in boosting engagement around pensions and finance in general. Creating effective signposting to regulated financial advice will be crucial in ensuring people get the financial help they need.”
The aim is to have a new merged organisation in place after autumn 2018. MAS, TPAS and Pension Wise will continue to run until the new body is launched.