The professional body called the Chancellor’s sweeping reforms, which seek to open up the retirement market to give people more choice over the options, “momentous”.
But it warned that it could give rise to so-called advice given by those not suitably qualified and regulated, which could be a dangerous breeding ground for mis-selling.
The Chancellor accompanied his retirement reform with the announcement of a guidance guarantee scheme that demands providers guarantee their clients get free impartial advice at point of retirement.
But the IFP said advice should not be given at single points in time, rather it should consist of a regular reviewing progress of a set of pre-established clear goals.
Chief executive Steve Gazzard said: “These changes mean that ongoing financial planning advice provided by certified financial planner professionals and by accredited financial planning firms has never been more important for those consumers approaching retirement.
“The process a financial planner takes clients through, which includes cashflow forecasting and various ‘what if’ scenarios, supports this understanding in a way that a single moment of time piece of advice can never achieve.
“Advice at a single moment in time raises the spectre of further mis-selling or mis-advice if it is not facilitated by suitably qualified and regulated individuals. In this context, we need to be clear whether the ‘face to face impartial advice’ will be fully regulated advice or not.”
Advisers agreed the new right to advice scheme raises questions over whether customers will indeed get impartial advice before they retire.
Read more about the announcements in this year’s Budget HERE.