View more on these topics

&#39Pension advice needs stochastic modelling&#39

Financial advisers are ill-equipped to cope with customer enquiries on how proposed changes to occupational and personal pensions will affect their pen sion funds, says management consultant Tilling-hast-Towers Perrin.

The company is warning that investors risk getting poor advice and could be missold due to advisers&#39 lack of knowledge about changes such as the possible introduction of a £1.4m lifetime contribution cap on pension funds with excess taxed at 60 per cent.

Tillinghast-Towers Perrin principal Bruce Moss says the financial services industry needs to make greater use of stochastic modelling techniques.

He believes these techniques help investors develop a better understanding of the relationship between risk and reward of different investment strategies and what action to take to achieve financial goals.

Moss sees stochastic modelling as a way for advisers to ensure they are compliant and believes it helps them to improve efficiency levels.

He says tools such as Tillinghast-Towers Perrin&#39s eValue advice system could help the industry have tighter control on its compliance issues. It is an online advice system available to product providers, financial advisers and employers wanting to provide analysis tools to help staff make financial decisions.

It has a broad focus that includes retirement planning and other financial goals like school fees planning, repaying mortgages and maximising retirement income.

Moss says: “Stochastic modelling techniques are vital to combat the unrealistic expectations of investors and protect the reputation of the long-term savings industry.

“For example, if these technques had been used when assessing the potential benefits of switching from final-salary to defined-contribution pension schemes, the dangers of this would have been made much clearer.”


Investor confidence still rising, says JPMF

Investors are becoming increasingly confident about prospects for the stockmarket, according to JPMorgan Fleming. Its investor confidence index rose to 92 in November from 78 in October, the highest it has been since March 2002. JPMF says twice as many investors are now positive about the stockmarket than are pessimistic. Head of market research Peter […]

Scrummy stocking fillers

A big thumbs-up to those cheeky rugger boys from Clerical Medical. Last year&#39s winners of the life insurance challenge – the Preece Competition – are pictured in a 2004 calendar in a series of suggestive poses with strategically positioned rugby balls. At £5, which goes to HBOS&#39s chosen charity, Macmillan Cancer Relief, the calendar is […]

FSA probe into illegal trading

The FSA is reported to be focusing its investigation into illegal trading on the top 20 fund managers with significant investments abroad. The regulator&#39s probe into abuses of market timing and late trading follows a similar investigation by authorities in the US headed by New York attorney general Eliot Spitzer which found the practices to […]

No change in Bank of England base rate

The Monetary Policy Committee voted today to keep base rate at 3.75 per cent for another month. This was largely expected by the industry following a 0.25 per cent increase last month. Charcol senior technical manager Ray Boulger says: “Any decision other than no change would have been a major surprise &#45 we do not […]

Converting pension savings to a retirement income…

Since last year’s reforms to pension legislation, a significant number of retirees have chosen income drawdown over purchasing an annuity. Income drawdown is more flexible than an annuity. However, it also increases the likelihood that individuals won’t be able to maintain their income throughout their lifetime. In this short video, we explain the risks that […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm