Collaboration between the Financial Conduct Authority (FCA) and the Department for Work and Pensions (DWP) is “lacking” and the people suffering are those “that can’t afford advice,” an IFA told a DWP policymaker at the RP Forum.
During a session at the Retirement Planner Forum on 14 June, Rose and North IFA Hayley North criticised the speaker, DWP lead analyst Laura Webster, for the lack of collaboration between the government department and the regulator.
“Collaboration between the FCA and the DWP is lacking and the only people suffering are those that can’t afford advice, she said.
She added: “The regulator wants to restrict everything we give advice on. For example, we have to make sure we provide the reason for our client wanting their cash-free cash, the FCA insists there is a justification but this is unnecessary.
“Of course, in some ways we’re delighted by this because we make money from it but the people that suffer from this are those that can’t afford advice, those scared of taking advice and who don’t know what to do.”
She also argued that changing the structure of Pension Wise, which the government plans to merge with the Money Advice Service (MAS), The Pensions Advisory Service (TPAS) to create two new bodies, would not address the problem of the lack of joined up thinking.
She said: “Tinkering at that sort of level won’t have any impact. Change needs to start at the bottom.”
North also argued that the problem of the advice gap will get worse as auto-enrolment continues to progress and bodies such as Pension Wise were essential.
“There will be millions of people with several pots and they won’t know what to do with them. They won’t know how to transfer or what the risks are. The problem will only get worse.”
The DWP also came under fire from Combined Financial Services’ IFA Jonathan McColgan who said that the government’s constant tinkering with pensions was “muddying the water” for savers.
“People don’t trust pensions when their pot of money is regarded as a tool for each consecutive Chancellor of the Exchequer to make new rules around.
“If we are to encourage consumers to see their pensions as a positive thing, the government needs to stop legislating every year.”
The government announced plans for another Pensions Bill in last month’s Queen’s Speech to tackle exit fees and master trust regulation.
Webster listened to the concerns of the audience and promised to take all comments back to pensions minister Ros Altmann.