The ABI has written to the Chancellor and the FCA with an action plan. The key element is to create a new ‘customer control’ mechanism that will allow customers to access their pot without having to pay for advice.
The organisation said the Government, regulators, providers and advisers need to get involved together to address the issues.
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Last week, the Government said it would take action to “strengthen people’s rights to access their pensions flexibly” after reports that some providers were placing “unjustifiable barriers” to pension freedoms.
The ABI said its ‘customer control’ proposal would take the place of the legislative requirement to pay for regulated advice by an FCA authorised adviser where customers have pension savings that have Guaranteed Annuity Rates and are valued at £30,000 or more.
The ABI said this customer control mechanism should be delivered through a specific guidance session by Pension Wise or the Pension Advisory Service and enshrined in a protocol agreed with the FCA and the Financial Ombudsman Service.
ABI chairman Paul Evans and ABI director general Huw Evans said in a joint letter: “While the vast majority of customers so far have successfully exercised their choices without complaint, it is clear that implementing the law and regulatory requirements as they currently stand is not enough to ensure the benefits of the reforms can be universally felt.
“This plan proposes a solution to the problem of customers unable or unwilling to access advice in the circumstances set out in the law.
“We also request the urgent establishment of a joint taskforce between the Government, regulators, providers and advisors to work through the outstanding issues and deal decisively with them.”
They said: “The ABI and its members remain completely committed to making the pension reforms a success so customers can make the most of the pension freedoms.
“But it is clear this cannot happen fully without a decisive and joined up approach to the implementation challenges that have arisen. If the proposals in this Action Plan are taken forward, we are confident customers will be able to enjoy the freedoms in a suitably regulated environment.”