Guidance - what should and shouldn't be covered?

When I look at the glut of industry comments focused on the current, and any future, Pension Wise guidance interview, I can't help but think of The Rolling Stones' song, 'You can't always get what you want'.

Stuart Wilson
27th October 2015
stuart wilson lla

Of course, the next line is, ‘...but if you try sometimes, you just might find, you get what you need’. It seems to me that there is a considerable list of ‘wants’ when it comes to guidance, which almost seems somewhat ironic because large sections of the industry didn’t want guidance in the first place.

That said, we have always been in favour of it, and I believe as it becomes a more structured part of the ‘in/at retirement’ marketplace it will undoubtedly evolve into a structure which will deliver in most areas. The point of course is that these new services are not built overnight, neither are they likely to see an immediate take-up from every single individual who has accessibility. However, as long as the market communication continues and everyone eligible is completely aware of their ability to access guidance, then I’m sure we will see that development occur.

In terms of content, there has been a ratcheting up recently from those who would like to see their sectors more actively discussed during guidance. Commentators from every single part of the later life advice sector appear to be putting the pressure on at present in terms of what the guidance interviewers should cover with their interviewees.

Thus, we have the Equity Release Council suggesting that equity release should be part of guidance, we have those from the annuity sector suggesting likewise, and of course given the recent furore around lending to those already retired or into retirement, there are some calls for mortgage/lending coverage as well. That’s without even considering the main thrust of the sessions - that being the pension(s) available to the individual and how they can draw income from them.

So, where do we go next with guidance? Can we feasibly ensure that every single area of potential relevance and interest to the individual is covered? Well, the answer is yes, however I think we would be looking at either a number of separate guidance sessions or potentially one very long one. That doesn’t mean that it would not be a worthwhile option to look at these options because clearly for some people there will be greater interest in selling their annuities on or looking to release equity from their property. Indeed, in the case of the former the Government has already signalled that guidance will be provided in this area.

So, practically what other topics can be covered by guidance? Well, to my mind, property wealth seems like a non-negotiable especially when we are dealing with what is likely to be the individual’s biggest asset. Even if it’s simply signalling that the house can be used, and the equity accessed, then we are a big step on from where we currently sit. Again, this doesn’t need to be pored over in a tremendous amount of detail but outlined as a potential option and discussed perhaps as much as the client wants to delve into it.

Of course, if we had a seamless transition from guidance to advice then we would be able to move the conversation on quickly with a professionally qualified adviser who could look at these options. However, not only do we not have this but we also have an advisory community which is, for the most part, is not authorised or qualified to provide advice on all later life product areas. This is why our guidance-plus option can take a perhaps wider guidance session and help turn that into more specific, tailored options, which can then be secured via a full advice follow-up. It’s a three-stage process which each time provides more detail and information and eventually takes the client to a point where they can execute their needs in this area.

It seems likely that there will continue to be further debate on what guidance should and shouldn’t cover but again I believe there is nothing wrong with this being something of a moveable feast based on the individual’s needs. It should be quite simple to cover a small part of each potential option before a more detailed discussion of the more pertinent areas. From there, with a guidance-plus approach, the individual should be able to follow a path where their education levels have been increased and they have a far better idea of what they have and what they can do with it.

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