MIKE COADY

Growth Expert | Business Excellence | People Transformation
Mike Coady was appointed Chief Executive Officer of swissglobal in 2018, a position to which he brings a strong financial background and experience across a variety of roles. Mike is a skilled business strategy and growth leader, coach and motivator. He is a people’s person known for his ability to inspire teams towards excellence. He mentors his people and departments to transform their passion into outstanding results and long-lasting relationships with their clients.
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Chancellor’s ‘right to advice’ policy actually means ‘right to guidance’

Mike CoadyFinancial News Chancellor’s ‘right to advice’ policy actually means ‘right to guidance’

Chancellor’s ‘right to advice’ policy actually means ‘right to guidance’

Just weeks after George Osborne’s Budget announcement that all pensioners will have “a right to advice”, his promises are, it would seem, already beginning to unravel.

According to the Financial Conduct Authority (FCA), the UK regulator, the Chancellor was actually referring to the fact that “free and impartial guidance” would be available to individuals on the cusp of retirement, rather than regulated financial advice for each individual who requires or seeks it.

To my mind, this is a very different proposition.  The “right to advice” pledge could quite reasonably be understood by pre-retirees as having free access to appropriate, independent financial ‘advice’ with regards to retirement planning; and not generic, one-size-fits-all ‘guidance’.

The government is allocating £20 million to pension providers and trust-based pension schemes to get this policy off the ground.

In my view, the whole notion is somewhat surprising. Why? Well, the Chancellor now says he believes people should have access to independent financial advice, but thanks to the Retail Distribution Review (which came into effect at the end of 2012 – so therefore under the current coalition), many people, especially Britain’s middle income earners, have been denied access to such advice because a number of banks and financial advisory firms have exited the market due to the perceived regulatory burdens.  Intriguing indeed.

My concern with the generic ‘guidance’ is that some individuals may well believe that they are then fully equipped to make comprehensively informed decisions and be able to implement long-term strategies regarding their financial objectives.  In my opinion this would be akin to Googling a serious health issue, rather than seeing a doctor; or taking legal advice from someone in your local bar who might have had a similar issue, rather than consulting a lawyer.

Frankly, when it comes to financial matters, the stakes are far too high and all-encompassing for people and their families not to seek professional independent expertise – and the fact of the matter is that ‘guidance for the masses’ cannot and should not be relied upon.

I would assume that consumer groups will be used within Mr Osborne’s scheme to work with the professional bodies, to ensure that the ‘guidance’ that is administered is, indeed, “impartial” and given by regulated and appropriately qualified professionals.  However, there is always the concern in initiatives such as these that this may not ultimately be the case.

We will, of course, have to wait and see how the scheme plays out.

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Mike Coady
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