Millions to get better pensions advice, says FCA

Millions of consumers will be able to get better and cheaper advice on their pensions and savings under a plan launched by the Treasury and City regulator.

This could range from so-called online “robo-advice” offered by banks and other institutions to making it easier for independent financial advisers to give specific advice rather than just guidance to customers.

The moves by a joint committee set up by the Treasury and the Financial Conduct Authority are aimed at some 16 million people trapped in a “financial advice gap”.

This follows the retirement of thousands of IFAs following tougher rules on the commissions they could earn and the withdrawal by many banks from the market after they were fined for mis-selling or providing poor advice.

Charles Roxburgh, director general of financial services at the Treasury, said there was a clear need for intervention by the regulator and the Government to help both consumers and industry benefit from new and more cost-effective ways of delivering high-quality advice and guidance.

Tracey McDermott, acting chief executive of the FCA, said: “The package of reforms we have laid out today will help increase both the accessibility and affordability of the advice and guidance to ensure that consumers get the help they really need when they really need it.”

Among recommended changes are the use of “robo-advisors”, which allow banks and other firms to guide customers through a range of investment options using online algorithms.

Firms may be given more flexibility in training employees to give financial advice, and consumers could be given limited access to their pension pots to pay for advice.