Mike Teall, a pensions expert at PA Consulting, is quoted in Money Marketing’s article on pension freedoms and regulation.
Mike notes research collated for the Financial Conduct Authority’s Financial Advice Market Review which suggested that there was a 40 per cent increase in the number of people taking advice in 2018.
“Despite this uptick, anecdotally there are still people making poor decisions at retirement. Savers who are keen to dip into their pension pot are often taking all the money out in one go and paying more tax than if they had spread the withdrawals over several years,” he says.
“There has to be some kind of backstop for people who are taking tax-free cash and leaving money in drawdown. That money needs to be invested sensibly – and there is a chance that, without advice, people could make the wrong decision.”
The article goes one to say that Mike regards investment pathways as a helpful mitigation to this and says pension providers are supportive of the idea.
He says: “It gives them the ability to provide simple options for customers that they know the regulator is happy with.
“But if you are an adviser who wants to look at individual circumstances holistically you are bound to find flaws in this type of process.”