Baroness Ros Altmann, former pension minister and campaigner, is throwing her weight behind the Transparency Task Force, having been named its one hundredth Ambassador.
Her appointment comes as the organisation publishes a report with RSA and Newgate Communications highlighting a ‘worrying loss of trust and confidence in financial services’ across all developed countries.
The report, which chronicles financial debacles around the world over recent decades, calls on regulators to do more to improve consumer protection and increase transparency.
The report accuses regulators of having been behind the curve as rogue traders, lax regulation and unregulated products have caused major scandals and losses.
The report argues that this lack of trust means the pensions industry has to work harder to improve engagement and value for money. It argues more transparency, fairer charges and improved products can encourage higher contributions.
Altmann says: “Scandals still persist as more needs to be done to treat people fairly: The pensions industry has ongoing problems. I have called for simpler, more transparent charges for many years and have highlighted the net pay/relief at source scandal that forces the lowest earners to pay 25% extra for their pensions. Error rates in auto-enrolment and other pension data must be identified and corrected, so that a reliable pensions dashboard can be delivered. These problems are good examples of what can go wrong when the pensions industry fails to consider customer interests carefully.
“New risks are emerging all the time: The era of ‘light-touch’ regulation – which was more like ‘no-touch’ regulation – resulted in the 2008 financial crisis. Since then, different risks have emerged. New technologies have enabled the rapid spread of unregulated, decentralised investments, which make greater demands on the regulatory system.
“We should consider banning unregulated investments in Sipps. Cold-calling and unregulated ‘introducers’ have enticed unsuspecting individuals to invest their pensions in bogus schemes which have subsequently collapsed. If the sector wishes to regain the trust of consumers, it seems essential that new approaches are adopted. One proposal might be to ban the inclusion of unregulated investments in mainstream pension products such as Self-Invested Personal Pensions.”