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This Nest is cuckoo

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Ros Altman, Steve Bee and Alan Easter are perhaps unlikely bedfellows, but each in their own way have articulated serious and justified misgivings about Nest.

With such diverse but respected opposition, I would suggest it should be too early to throw in the towel.

If it isn’t a cliché to quote Thomas Jefferson: “All tyranny needs to gain a foothold is for people of good conscience to remain silent”, so we must not.

I am not questioning the benefits of auto-enrolment, which is a long overdue measure to ensure that everyone who can afford to save for their retirement does so, but I believe the Nest solution is an expensive and unnecessary option which should be recognised for what it is.

Whilst it may seem that the battle for a deal for the citizens of this nation is lost, as I see it there is still a very powerful weapon which can defeat Nest - social media. Previous attempts by government to impose ill-conceived pension solutions on the British public have been supported by massive government propaganda campaigns, yet when anything has gone wrong the bill has been sent to the financial services industry.

Nest chief executive Tim Jones will no doubt take up the role of minister of propaganda, but he will not be able to constrain honest, objective communication to his potential victims.

I believe the Nest solution is an expensive and unnecessary option which should be recognised for what it is

A wide range of social media services are suitable for this purpose. Linkedin and Twitter particularly should be ideal mechanisms for communicating the truth about Nest to employers and employees alike.

Advisers should identify employers keen for guidance on Nest and produce regular guidance for them as the detail emerges. Articles by industry experts like those listed above should also be actively promoted to employers.

It is regrettable that, as an industry, we were not more effective at providing an alternative to an outsourced and off-shored government quango with all the unaccountability embedded in Nest.

The great thing about Nest is you only need to tell the truth to undermine it.

Jones is clearly a very smart operator and should not be underestimated, but if as a community we can offer employers genuinely better solutions with levels of service and guidance for their employees, this magpie can be starved before it has wings. Advisers need to be talking now to employers about what Nest will mean.

In the coming months employers will doubtless be hungry for objective information on how Nest will affect their employees.

Adviser firms should move quickly to supply such information and social media provides an ideal environment where smart people can outwit a fat cat quango with taxpayer loans burning a hole in their pockets for expensive and outmoded advertising. The cost of entry for social media is low but there is the need to be consistent.

How many employers would happily accept a pension scheme for their employees operated by a company with no significant background in the area, with an overseas call centre, offering a fund range which, based on recent statements, will sound about as simple to the average worker as brief notes on nuclear physics, with payments going into a fund from which they can get into but never leave. Imagine trying to write a suitability letter to justify such an arrangement.

It has been frequently pointed out that all the costs of the scheme will fall on the members, so if this start up fails, who ends up footing the bill? What are the chances that in the event of failure the entire member’s contribution could be wiped out? Does this alone not make it urgent to avoid Nest membership at all costs?

Standard Life has raised serious concerns over the validity of projections on the size of membership.

Should these prove accurate it will doubtless take far longer than anticipated to repay the government loan to set up the scheme so presumably the 2 per cent up front charge could also continue for far longer.

Perhaps it is worth asking whose figures on pensions would you be more likely to trust? Those of a life office full of actuaries with nearly 200 years experience in running pensions schemes or a self serving government quango? Personally I don’t find that one a hard call.

Telling the truth about Nest is a perfect way for advisers to hone their social media skills. If you love it or you hate it, don’t stay silent on it - your clients need your guidance.

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