Providers should be forced to deliver the guidance guarantee if they are to do the right thing by their customers, says Fidelity's head of retirement insight Alan Higham.
Speaking at the recent Henry Stewart conference, Higham responded to recent comments made by Legal & General chief executive Nigel Wilson that independent bodies such as The Pensions Advisory Service (TPAS) should deliver the guidance guarantee.
He said: "Is it better to ban providers from delivering this guidance because they can't be trusted or do we understand that people will talk to their providers and make sure they are doing the right thing by their customers?
"Make them do it properly as it's not enough just to point them in the direction of TPAS. Maybe they could hire advisers to help them meet demand. Don't give them (providers) an easy ride."
Higham advocated the development of a kite mark standard so that people can identify who they can go to to get the best guidance.
"We need to have better standards for non-advised services," he said. "We cannot afford for people to disengage from this process. Is it right that people are still making bad choices? How do we work out what a good outcome is?
"If we could get advisers involved in this process then I reckon we could offer the service for around £400 per head. That is a hell of a lot less than many people are paying for a badly priced annuity."
However, TPAS chief executive Michelle Cracknell believes the service is capable to delivering the guidance guarantee.
"We do have the capacity to deliver this service though we would have to significantly upscale and recruit pension professionals to help us deal with this," she said. "However, I believe the government needs to highlight the TPAS service in the same way as it has done with auto-enrolment as there is a lot of work to be done to raise awareness of the service."
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