So dp23-5  “Advice Guidance Boundary Review – proposals for closing the advice gap” is out.   

It’s like they want to make it as tedious sounding as possible.  Possibly so we can really pretend there is hard work to do in December between the parties and chocolate.   

Anyway, onto what I think about it.   But first just to frame how I have looked at it.   First I worked for 25 years at a firm that only dealt with advisers.  Secondly how can we get a regulatory environment that actually means people can get meaningful help online at a price they will pay.?  And of course my whole “How does it impact pensions dashboard?” thing.   

What actually will you be allowed to do in Targeted Support? 

I like the basic idea of Targeted Support.   It’s always struck me that there needs to be somewhere between the generic information of guidance and the full fat service of Advice (capital A).  Being able to help people in a way that starts to make sense for them is a great thing.  Especially if it means not charging 3% plus 1% trail for the privilege.   

The main thing for me is that it is not clear if a firm will be able to take into account any information on the clients other savings.   For me this would allow for more useful support without necessarily tipping into personalised advice.  Plus, of course, it would mean that Targeted Support could use data from Pensions Dashboards.   

Let’s lay out an example.    I would suggest that a client with £30k in a pension should get different assistance if it was known that they had £600k in other pension assets than if it was the only pension pot they had.  Surely a clients overall assets are a key way that a firm could legitimately look to segment them.   

I will pin my colours to the mast here.  Pensions Dashboard data should be allowed to be used in Targeted Support and firms should be allowed to take customers other savings into account when they segment. 

What is the difference between Targeted Support and Simplified Advice? 

One of the main differences between Targeted Support and Simplified Advice is in terms of charges.  Targeted Support is free at the point of delivery from explicit charges and Simplified Advice has explicit charges.   

It’s an obvious distinction to make.  But is it the right one?   Say I want to offer a service to customers that moves across the line into Simplified Advice.  Surely I don’t have to charge explicitly, do I?  I cannot include that as part of the overall service?   

The reason I think this is important is that, given the limits that are potentially going to be applied to Targeted Support, I thinks some firms will legitimately need to consider going down the Simplified Advice road just to provide the right level of help some people will need.   

Most pensions at some point need some decisions to be made.  In accumulation it’s what funds should I invest in.  As you approach retirement it might be concerns about when you might be able to afford to retire or what pot to start using first or perhaps reducing your risk profile.   To an extent, these will be personal to you and your circumstances.   

If the product is already in place, like it often is with a pension, I would suggest that the best place to ask about the options within the product is the provider.  It just feels wrong that they cannot help you identify the right option for you as part of the overall service of a product you already have with me.  So long as there is no particular financial incentive I don’t see what the issue is really with embedding this advice into the overall service. 

Summary 

I suppose fundamentally I still have a view that a lot of people need a basic level of “personalised” online help.  If we can find a way to do that without having to charge the customer money they don’t have then that should be a good thing.    

My biggest fear is that whilst fixing the glaring gap in the definition of advice we are just replacing it with more arbitrary boundaries that don’t allow us to help people.