Plans to boost savings ‘are heading in the right direction’

John Barrass also said that the advice market remained “incredibly competitive” following a period of regulatory change.

He made the comments during a trip to Leeds to meet the association’s Yorkshire members.

According to Mr Barrass, one of the key talking points revolves around the steps being taken to encourage more people to save in the longer term.

Mr Barrass told The Yorkshire Post that Government plans with regards to long term savings were headed “in the right direction.”

However, he stressed that it was important to ensure people got the right kind of information on different investment products, so that they can make their pensions grow.

“It’s extremely important for people to save,’’ he said.

“Kick starting is an issue, you do need, in a way, spectacular Government intervention to help them really think about saving.

“The Government’s announcements about pensions [allowing over 55s to draw down their pension pots in chunks] recently has done quite a lot to encourage people to think more, so it’s actually quite a good kick start mechanism itself.

“Making sure people understand that savings are important for them over the long-term, and that without that, they’re going to have a difficult later life for themselves is what really counts.”

Mr Barrass added: “It is also important to understand risk - you cannot save and get returns without risk.

“There has to be risk otherwise there’s no reward.”

The Retail Distribution Review (RDR) was brought in to remove the conflict of interest created by commission payments.

“Clearly that has resulted, to an extent, in the contraction of the advice market,” said Mr Barrass.

“It doesn’t mean that you’ve lost the quality of advice.

“The advice market is still incredibly competitive so you haven’t lost too much. But you have contracted the amount of advice which people want because there are some people who can’t pay for that.”

He said that the introduction of RDR in January 2013 has seen investors go to two extremes.

He added: “In the longer run, we’ll see the regulator looking at how you handle this and there are market advisory considerations being made by the regulators.”

Mr Barrass is upbeat on the market’s prospects despite the turbulence. He said: “It’s clearly bounced back from the lows of a few years ago at the height of the crisis.

“We are now back where the UK main index is about 6,500 or thereabouts. It hasn’t yet broken through the record of 15 years ago but it might do. You’re looking at that hopefully continuing.”

Although he feels positive, Mr Barrass is aware of the market’s volatility. Commenting on China’s slow growth, the political problems in Ukraine and the near-stagnant eurozone, he said: “These are always going to affect valuations of assets and so on.”

On the troubled eurozone Mr Barrass said: “The question which the market wants answered is whether you’re going to get the European Central Bank involved in a quantitative easing programme of the kind that was successful in both the US and the UK.”