"Tory change of attitude is heart of the matter" "Tory change of attitude is heart of the matter"

22 Feb 2017 Ken Davy

In a recent editorial, she rubbished the government’s initiative to allow clients to withdraw up to £1,500 from their pension pots to pay for advice on the basis that they will think this makes advice accessible to all and that therefore it's 'job done'.

Unfortunately, on this occasion, I believe Emma, and many other commentators, missed the key point: the sea change in the government’s attitude towards financial advice and advisers.

Note the word is 'help', not that this will completely solve the issue, and you can begin to see how far we have come as a profession in just a few short years.
Not long ago we had Mark Hoban demonstrating his own political incompetence by infamously comparing advisers to 'Big Mac burger flippers'.  Compare those sentiments with those of Simon Kirby, the economic secretary to the Treasury, who said: "Pension and savings decisions are some of the most important a person will make during their lifetime" and "this allowance will help people get the financial help they need to plan their retirement".

Note the word is 'help', not that this will completely solve the issue, and you can begin to see how far we have come as a profession in just a few short years.

Views on the adequacy or otherwise of £1,500 will clearly differ strongly. However, as Confucius once said: “The journey of a thousand miles begins with a single step”.  In addition, the government’s announcement contained the results of research they had commissioned, which showed that only 14 per cent of people were confident of their ability to plan for their retirement without advice.  

I believe the government has taken a giant first step in support of professional financial advice by facilitating the tax-free withdrawal of up to £500 for each of three years.  It is crucial to note that the payments must be made direct to an authorised financial adviser.

I believe the availability of a tax-free withdrawal for the specific purpose of obtaining professional retirement advice will be very good for clients. Furthermore, it signals a fundamental change in the attitude of the government to the importance of financial advice.  

I clearly hold a different view to my editor so I will have to throw myself at her mercy to see whether I still have a column to write next week.

Ken Davy is chairman of SimplyBiz Group


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