Guidance or Advice? The confusion yet to follow

 

Following the significant changes in retirement planning detailed by the Chancellor in his Budget of Spring 2014, we have now received the full details of the ‘guidance’ planned for retirees from 2015. Although this document is still in consultation, the details are quite clear on the way the government expects this guidance to be deployed.

The keyword that is apparent is the word 'guidance' rather than 'advice'. It is planned that guidance within set parameters will be provided by organisations such as the Money Advice Service and TPAS (The Pensions Advisory Service)  to detail to clients the options that are available to them and the way that they could approach their retirement – without actually providing advice. No individual products or solutions, it appears, will be provided other than to detail the options available to you.

It is of interest that the planned cost of this service will be partly borne by the current advisory industry, almost robbing Peter to pay Paul.

For those that want to read further, the FCA consultation document is here:  http://www.fca.org.uk/your-fca/documents/consultation-papers/cp14-11

Chapters Financial is not responsible for the content of external websites.

As the Financial Conduct Authority notes in the detail (Page 6 & 11) ‘The guidance does not replace financial advice given by regulated advisers’ and ‘would be better handled by an authorised independent financial adviser (IFA)’ in reference to product or provider recommendations.

There is a part of me that feels that this blog is of a very defensive nature. To some extent it is, not because of the principles involved, but because of the confusion that is already being caused and the likely end result of consumers’ expectations not being met.

Although for some this guidance will be extremely useful, for others it will be like receiving the instructions for a flat pack furniture unit where the instructions and the reality seem to bear very little resemblance to each other. My concern is that the guidance offered may lead individuals to make decisions which are not suited to their circumstances and, although there is a planned complaints procedure, the ability to receive financial recourse in the consultation paper seems to be limited. This is not the case with true advice.

As you may anticipate, Chapters Financial will respond to the FCA's consultation along with many others. The devil will be in the final detail as to what will be achieved and whilst we applaud the plan to raise awareness of the retirement options that are available to individuals taking into account the new flexible legislation, the way it is applied may lead to much unnecessary confusion.

No individual advice has been provided during the course of this blog. If you would like financial advice and implementation (and not just guidance) on your retirement planning, then please contact the Chapters Financial team in Woking (01483 330800) or Guildford (01483 578800).

Keith Churchouse BA Hons FPFS
Director, Chapters Financial Limited
Chartered Financial Planner
Certified Financial Planner
ISO22222 Personal Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.

 

2013, a year of change in the delivery of financial advice

2013 has been an interesting year in the financial world with, amongst other headlines, the Bank of England's base rate remaining at its historic low of 0.5% and a change of Governor, the growth in the FTSE 100, and unemployment remaining stubbornly high.

It was only a year ago that we, amongst many other financial advisory companies, were planning for the change in the way financial advice is delivered to the public in the UK. We saw some moving in a positive fashion, preparing to meet the demands of the Financial Services Authority (replaced by the Financial Conduct Authority (FCA) in April this year) under their Retail Distribution Review (RDR) requirements. However many providers, including most of the High Street Banks, found the significant changes too much and withdrew from the market. Each had their own reasons, but it reduced the access that some of the public have to financial advice, as confirmed by the FCA later in the summer of 2013, referring to their ‘concerns’ to the Treasury Select Committee in September 2013. To be clear, there have been benefits to the changes, such as transparency of charging, and we have been advocates of this for many years.

With these RDR changes now nearly a year old, the team at Chapters Financial has seen a significant increase in business over 2013. This may be partly due to a better economic environment, however, we would argue that this is also due to the reduction in advice providers and the maintenance and enhancement of the quality of advice our services provide. As you may have read on our website, we were delighted to have achieved BS8577 certification in late summer 2013, which confirms our high and consistent standards. To improve our coverage of West Surrey, we have also opened a new additional office in Central Woking.

We hope that 2013 has been as positive for you as it has been for Chapters Financial, as our chartered financial planning company heads towards the end of its first decade in business in the south east and London. We plan to expand still further in future years and hope that we can help many more clients, businesses (SMEs) and enquirers.

If you would like to receive further information with regards to your own individual situation and circumstances, then please contact the team, either in Guildford or Woking.

Keith Churchouse FPFS

ISO22222 Personal Financial Planner

Chartered Financial Planner 

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.