Administrators should not fear financial advice boundary

Pensions administrators should be able to give guidance to scheme members without fear of breaching financial advice regulations, the Pensions Administration Standards Authority argues.

PASA chairman Margaret Snowdon (pictured) said people looked for help from friends and family, who were often insufficiently informed, or employers, who were "handicapped by fear of breaching the scary regulated advice boundary".

She said this had lead to a two-speed world in which people either had access to full and comprehensive financial advice or nothing at all.

"There is a role for pensions administrators here," she said. "Giving people information and guidance is not regulated advice - it is member engagement."

But Snowdon said administrators often felt constrained by the same limitations as employees, despite being ideally placed to help.

So her organisation has called for a "safe harbour" for administrators where they can talk to individuals about the advantages of paying into a workplace pension without being deemed as giving financial advice.

Snowdon said people grossly underestimated the work needed to encourage staff to join or stay in occupational schemes, let alone increase contributions.

This would be thrown into sharp relief by auto-enrolment, she predicted, and administrators had a role to play in helping people to make the right decisions when they were auto-enrolled.

"Pensions administrators are, most importantly, independent but they are also professionals as well as a hugely skilled and often under used resource," she explained. "The government should wake up to this as they may well be able to help it achieve some of its objectives."