• Defining ‘advice’ as providing a personal recommendation is positive but to engage customers, this needs to be explained in consumer terms
• Refreshed regulatory approach to streamlined advice should open up new guidance models and cut costs
• Digital innovation and new workplace models could help close the ‘advice gap’
• Very welcome that the report recommends HM Treasury ‘champions and plays a convening role’ in the industry development of a ‘pensions dashboard’
“But as well as regulatory definitions, we need to develop clear, intuitive communications that truly resonate with customers, rather than compliance technicians. This will help differentiate between advice and other guidance services that stop short of recommending a particular course of action. For example, advice might be described as a recommendation being made ‘for me’ whereas guidance might be framed as discussing options ‘with me’, leaving the final decision to the customer.
“It’s also important to make clear where personal responsibility lies under each approach, and what protections the customer has if things go wrong. Clear customer explanations will help individuals choose which support option they need and will also help highlight the value of professional advice with a personal recommendation.
“The renewed focus on streamlined advice is also welcome. Many individuals do not want full holistic advice across all of their needs and fuller recognition of a ‘streamlined’ or ‘focussed’ advice service on a particular need will allow unnecessary costs to be removed, making this option more cost-effective for advisers to offer and more attractive to a wider range of consumers.
“While many individuals will continue to want some human engagement, an openness by the FCA to allow the industry to innovate around digital guidance creates opportunities to reach far more customers. This, alongside looking at the workplace as a means of delivering support are positive steps forward to helping close parts of the ‘advice gap’.
“Aegon is a strong supporter of the benefits a ‘pensions dashboard’ would bring, allowing individuals to see information on all of their pensions in a single place, using digital technology. We are pleased the report recognises the role the Treasury can play in championing this industry initiative.”
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