Financial Advice v Financial Guidance

Published / Last Updated on 01/04/2014

Financial Advice v Financial Guidance.

Much has been made of the Chancellor’s Budget speech in March 2014 where he announced £25m would be made available for people to seek free advice on defined contribution pension schemes (investment linked pensions).

This instigated a mass outcry from the financial advisory industry seeking more information and how it would work.  The reality is that this money is going to be made available to groups such as the Money Advice Service (MAS), already funded by the financial services industry by levy, and also groups such as the Citizens Advice Bureau (CAB).  It will not be made available to qualified financial advisers to enable a scheme similar to that used in the legal profession (formerly legal aid).

Is it really financial advice?  A resounding NO!

  • For “advice” read guidance only.
  • It will not be delivered by financial services qualified staff.  You will likely not deal with IFAs or Chartered Financial Planners (unless they volunteer).
  • There will be no liability for the guidance that they give you. 
  • They will not compare the market for you.
  • They are technically not even allowed to use terms such as Personal Pension or Guaranteed Annuity, Index Linked Annuity, Flexible Drawdown as these are types of financial products and by saying them it infers “advice” – technically under Financial Conduct Authority rules they can technically only say “you need a pension” – they cannot say what type.
  • There is no insurance protection for guidance that they give you should it prove to be negligent or inaccurate.
  • There are no financial ombudsman rights for you to take any compensation case forwards if the actions you take are wrong and you lose out financially.
  • You have no rights.

This is not advice!

We suggest you always seek the help of a professional financial adviser such as ourselves.

  • Qualified, award winning staff.
  • Regulated advice.
  • Whole of market research.
  • Full written report.
  • Liability for the advice that is given.
  • Insured advice.
  • Full Financial Ombudsman Service rights.

The issue of financial advice v financial guidance is a tough one and we suggest the regulator will need to re-visit what it classifies as advice and guidance to ensure that you, the consumer, understands exactly what service you are receiving and what your rights are.

Your decisions at retirement are, behind having a family and buying a home, probably the most important financial decision of your life.  These decisions on pensions also affect the rest of your whole life.  If you get them wrong then your financial future i.e.  everything that you do: Food, Drink, Holidays, Cars, Leisure, Bills and more are affected. 

Do you really trust an unqualified person with limited financial services experience and with no liability to guide you on the final and biggest investment decision of your life.

Contact our team for retirement planning help and advice.


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