Why are advisers not more involved in the alpha group developing the pension dashboard? They should be at the heart of the debate, says F&TRC director Ian McKenna
The week before Open Identity Exchange and the Money Advice Service put forward their pension dashboard white paper proposals at the ABI, Royal London’s Steve Webb had drawn together representatives of the Swedish and Dutch pension dashboards and a software supplier with extensive knowledge of the Australian service. Each provided valuable insights into the challenges and benefits of delivering these services.
Collectively, these overseas voices made a compelling case for delivering a similar service in the UK and set out how it could help address the savings gap. Asked what, if they were to start their process again, they would do differently to make such a service better, they all said it would be hugely beneficial to make it compulsory for pension providers to supply data to the service, accelerating delivery in the process.
The importance of mandating participation was equally popular with audience members during the question-and-answer session; indeed, the only dissenter on this issue was Mark Boyle, the non-executive chair of The Pensions Regulator. Given his role, clearly he needs to be won over.
During his speech, Boyle presented the TPR vision of how pension dashboards should work and, to be fair, I agree with most of it, especially his statement that “we do not think there should be just one, one-size-fits-all, tool”. This makes it disappointing that the current proposal from the alpha group is for a single solution that may be white-labelled.
There are more shortcomings in the white paper. By leveraging existing technologies that many advice firms are already using to deliver their client portals, dashboards could be available within months, not years. The current proposal will also discourage participation by players in the UK Fintech sector if the programme is seen as a government-sponsored project competing with them. Furthermore, Origo’s work over the past decade should be a key part of the project.
Given that most corporate pension schemes, certainly by number of members, are arranged by EB consultants and financial advisers, judging by the 15 organisations involved in the alpha such firms are conspicuously absent.
This is bizarre; it could even be deemed sinister. Is such an omission deliberate? The ABI is not known for its love of the adviser market. Indeed, its part in championing the concept of the RDR was clearly intended to undermine the role of advisers.
This has, of course, backfired on the ABI because, in the post-RDR world, advisers are significantly more independent of life companies and far stronger financially than they were when firms were dependent on insurers for their income.
Delivering pension dashboards is a hugely important project. They can significantly enhance the ability of savers to understand their retirement income. But dashboards should address a person’s entire savings, not just those via pension providers.
I am sure this will happen and such dashboards will quickly become the starting point for the majority of consumers’ financial planning journeys, both when they begin saving and when they review their needs. Indeed, I suggest that, within just a couple of years, whose dashboard a client uses will be seen as identifying who they really regard as their adviser. Advisers must have a core role in delivering these services; it is imperative they are not sidelined by the ABI.
The one element of the white paper that should be supported is the need for a pension finder service. There needs to be an easy way for consumers and, potentially, their advisers to identify all of an individual’s savings and benefits arrangements.
It is suggested that this could be a single body. While I am currently open-minded on this, a single organisation would require strong governance and the confidence of all market participants.
Although the concept and objectives are laudable, the current white paper is a white elephant that will be obsolete before it arrives. This project can and should bring huge benefits to consumers but the issues above must be fully addressed if it is not to fall far short of delivering the best outcomes for savers.