Insurance brokers may be focused on selling insurance, but it might just be worth paying attention to what is going on in the pension sector at the moment too.
A consultation closed last week on the possibility of creating a single financial guidance body that could potentially merge Pension Wise, Money Advice Services and the Pensions Advisory Service. Savings membership organisation Tisa believes that financial advisors will benefit and that customers will reap rewards too, with director Charles McCready telling Citywire that “it should push them (customers) towards advice.”
Of course in insurance circles, with a host of direct propositions emerging, brokers would welcome something that would push customers to gain advice before they buy instead of focusing only on the cheapest deal – but Philip Brown, head of policy at LV=, believes that this ruling may assist people in the search for insurance too.
The insurer is calling for the single guidance body to focus on providing guidance for specific events, for example when someone buys a property or has a child, and prioritise helping people build financial resilience against the consequences of illness, unemployment, retirement and death.
It states that currently, only one in 10 people have insurance that would protect them if they couldn’t work due to sickness or injury but the new body has an opportunity to help ensure individuals and families have support when they need it most – and that includes insurance.
“This is a golden opportunity to tackle the issue of people retiring without support,” explained Brown. “There are many positive aspects of existing guidance services which should be retained, for example the Money Advice Service comparison tables and The Pensions Advisory Service’s dispute resolution service, but the new body’s remit could be expanded to help even more consumers.
“Requiring the body to focus on achieving quality outcomes from guidance, and report on the number of referrals to regulated advice, should ensure consumers have the help they need to make important financial decisions. Consumers genuinely value Government-backed guidance, particularly at key events such as retirement, and we expect the new body to provide the high quality, impartial guidance that UK individuals need.”
This call comes on the back of research from LV= which suggested that just one in ten (12%) over 55s who aren’t yet retired are planning to use the Government’s free guidance service, Pension Wise, while nearly four in ten (37%) have never even heard of it. A similar percentage (41%) say they don’t plan to take regulated advice when they retire.
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