The trade association has written to the The Pensions Advisory Service (TPAS) making the same recommendation to drop the word ‘advice’.
Both organisations have been tasked with delivering free and independent ‘guidance’ to retirees on their options from April. PFS chief executive Keith Richards (pictured) said their use of the words ‘advice’ and ‘advisory’ may mislead the public to believe they are receiving a regulated service, which carries consumer safeguards.
The public should be educated to understand the difference between ‘advice’ and ‘guidance’, he said, adding guidance offered by the Money Guidance Service and The Pension Guidance Service “would seem a logical and helpful change making it more intuitive for consumers”.
Though the advice profession may not claim ownership of the word ‘advice’, the changes make sense from a public interest perspective, said Richards.
Free guidance will be on offer to people aged 55 and over who request it from April next year.
It follows wide-ranging changes to the taxation of accessing pension pots made during Budget 2014 in March. The reforms will effectively end the need for retirees to buy an annuity.
“It is vital that the various bodies responsible for delivering the government’s pension reforms demonstrate a consistency of message,” said Richards.
“Aligning terminology will go a long way to ensuring consumers do not become confused when researching information regarding their financial planning needs.
“There remains a lot of debate regarding how the guidance guarantee might actually manifest itself. But one thing is for sure, it will place an even higher importance on the name of an organisation such as MAS to better describe the services they offer.”
