Robo-advice, and the permutations of it, has been discussed to the nth degree over the past few years.
But the logical question from developing a pensions dashboard for the consumer, on which they will be able to oversee and even manage their retirement pots, is whether this will detract from the advice process.
It is true to say pensions dashboard technology will end up giving greater visibility over pension pots and potentially empower consumers to make better decisions.
This could have a knock-on effect on advisers as the development of ever-better technology and more accurate algorithms, coupled with a growing ease of use and comfort factor among people when it comes to managing their finances online, could detract from advice.
Risk to advice and advisers
Indeed, the pensions dashboard could be the start of developing an entire financial dashboard where consumers can see the whole of their financial affairs and manage these online themselves, for little or no cost.
According to Duncan Howorth, chairman for ITM, one of the technology partners developing the dashboard prototype, this could present a danger to financial advisers.
He explains: “We would expect dashboard providers to develop rich functionality that would go well beyond viewing pension pots, with the potential to cloud model the benefits of consolidation and executing this.
“Such developments present further risk to the advice market.”
While Andy Kirby, managing director of The Pensions Portal, believes it could benefit, rather than detract from, advice, he does caution how clients use it and whether the individual should give full access to advisers.
He says: “People should think carefully about permissions – ceding authority for your representative to access your dashboard without compromising security.
“It would be helpful if automatic notes can be generated sent, for example, if the client is on target to achieve their desired level of income, and with what degree of certainty.
“The dashboards should also have clear calls to actions.”
Enhancing advice
For some, the launch of dashboards might end up bolstering the advice process.
This is the view of Mark Greenwood, regulatory policy manager for the SimplyBiz Group, who says: “We believe the pensions dashboard will signpost consumers towards advice.
“Research from the Department for Work and Pensions shows individuals have an average of 11 different jobs in their working lifetime, which could mean 11 different pension pots.
“The dashboard does not offer advice but merely pulls together data from a range of sources, so it undertakes an administrative task that is, frankly, a waste of an adviser’s time.
“This freed-up time can then be spent with clients, concentrating on service we know they genuinely value, and helping to plan their financial future holistically.”
