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Advisers slam BBC Panorama pension probe

IFAs and contributors to Panorma’s programme on pensions have hit out at the way the issue was presented.

Who’s Taken My Pension, broadcast on BBC1 last night, took three pension funds and calculated that over 40 years someone contributing £200 a month would pay between £82,500 and £99,900 in fees. It highlighted that the fees represent between 60 and 80 per cent of the money contributed.

ABI acting director general Maggie Craig was interviewed for the programme and says the calculations are flawed and misleading.

She says: “What consumers are interested in is how much the money they have put into their pension has grown by. It is incorrect and irresponsible of Panorama to look at the amount taken out in fees in isolation to how well the fund has performed.”

She adds: “How much you end up paying depends on how well your pension is doing. If it is not performing well, you will pay less in fees.”

Craig also says the programme’s use of 1.5 per cent as the average charge was incorrect as most charges were between 0.5 and 1 per cent.

Hargreaves Lansdown’s head of pensions research Tom McPhail (pictured) was one of the programme’s pension experts but says that information he provided was taken out of context.

He adds: “Simply presenting that snapshot [of charges] in isolation failed to tell the whole picture. It would have done the viewers a service to offer some more positive messages alongside the understandable criticisms about charges so they could take that way and do something with it.”

Informed Choice managing director Martin Bamford says the programme was sensationalist, but he hopes it will act as a wake up call to investors.

He says: “They were obviously highlighting some of the worst case scenarios and some of the providers and funds were ones that as an investor you would not want to be in.”

He added: “The subject was not as well covered as it could have been but if the end result is to send people off to seek professional advice and take more of an interest then it is probably a good outcome.”

Worldwide Financial Planning IFA Nick McBreen said his firm has been warning about “lousy” pension contracts for 10 years. He says: “They should have had statistics for how much capital is still tied up in these toxic funds.”

McBreen says people are being seduced into thinking their funds will be invested without charges being paid.

He says: “Charges should be fair but having no charges means no reward for people doing the job. There is no free lunch and however much consumer watchdogs keep telling us there is, there is not. The charges can pale into insignificance when you are getting the correct return on the fund and it matches the client’s expectations.”

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Comments

There are 79 comments at the moment, we would love to hear your opinion too.

  1. Ha ha for Hargreaves as they are often spin the stories to suit their needs

  2. Ironic that the BBC – funded by the most iniquitous tax imaginable – does a hatchet job on an industry they know nothing about on the basis of charges.

    Unlike a pension contract, we all have to pay the BBC their tax and the presenters of the programme directly benefit from the zero competition and protected bubble the BBC operate in.

    Oh, and it was nonsense and factually inaccurate.

  3. Incompetent Regulators Awards Team 5th October 2010 at 3:05 pm

    What about the BBC’s fat pension scheme which we have to pay for via license fees. Also they recently had had outrageous improvement to their final salary scheme all paid for via license fees. What about the poor old ladies who can’t afford their license fees whilst the beeb senior staff are awarded pensions worth millions. The BBC is a disgusting orgnisation and we should all stop paying our licenses.

  4. Perhaps we should do a programme on the BBC. We could outline that the licence fees we pay for are made up of 80% of complete rubbish programmes.
    There should be major complaints being forwarded to the BBC.
    Perhaps us IFAs should bombard them with letters of complaint>

  5. Sometimes a negative presentation can have positive outcomes – if this puts people of pensions then they will have to find other ways of planning for their retirement and as the above states should lead to people seeking independent advice.

    Putting all your eggs in one basket – eg a pension – has never been a great idea anyway – common sense says that a variety of vehicles should be considered for retirement planning, ISA’s, property, other investments, national savings products etc, in this way the individual is using different asset types to try and build up a fund. If this helps achieve this then it will be a good thing!

  6. Whilst I support that anything that focuses the mind on pensions must be good, the programme was hopelessly poorly presented to the degree that its sole objective appeared to be destroy any remaining consumer confidence in the industry. There was no final collective message of action either.

  7. Michael Hayward 5th October 2010 at 3:16 pm

    I felt it was a particularly crass and sensationalist piece of petty financial journalism. The only end result being to encourage the public to be even more cynical than they are now, about pensions and the financial services industry.

    Surely, the trend over the past 10 years or so has been for costs to come down on pensions – compared to many of the old style contracts new ones are a lot more cost efficient..

    The implication that a charge of 1% pa was a rip off and expensive was unbelieveable.

    These programme makers seem to believe you have a right to stellar investment returns for absolutely no cost at all.

  8. Scott Taylor-Barr 5th October 2010 at 3:18 pm

    I didn’t see the programme myself, but reading this I do get a sinking feeling. I refer pension business to a specialist, but when I speak to clients in general terms about pensions many refuse to even look at them – mostly due to horror stories and hype. The really sad thing is they’re not making anyother type of arrangments, they’re just not doing anything. I dread to think what is going to happen when these folks reach retirement age.

  9. Didn’t see the programme. Did they look at St James Place’s pension contracts and charges at all?

  10. I regretfully missed the programme but it looks as if Panorama have totally lost the plot. Until recently, I tended to agree to a certain extent with views apparantly expressed in the programme but pensions have proved life savers for many of my clients in more ways than one over recent years. Panorama failed to grasp the benefits of a pension such return of fund on death, tax breaks and building up a retirement fund. Also, the programme failed to grasp that you cannot get anything for nothing. Look at the state (excuse the pun) that the State Pension is in, which is obviously not run by specialists and on the cheap. Quite clearly, our services in the financial services industry are neither valued or appreciated yet we will pay £5million per annum to a football player, what pension are they going to provide?

  11. But SJP are doing loads of business! And they are even whole of market! YCMIU

  12. As the Journalist who defended his stance last week at the suggestion that journalists and presenters of Financial material should be suitability qualified BEFORE writing articles. This story only goes to show how wrong he was.
    A usual sensationalism takes priority over fact.
    Charges are part of business. Perhaps free broadsheets will give us unbiased news.?

  13. A lot of old PP contracts incorporate horrendous charges, the Allied Dunbar ones being a very good case in point. They even used to levy an extra monthly charge for your initial units to be refundable on death!

    Today’s contracts, though, are very different ~ no flat policy fees, no initial units, no reduced (or even nil) allocation periods, and whilst the AMC’s for some funds are still a bit on the heavy side, diligent portfolio monitoring on the part of a good adviser can go a long way towards justifying them.

    More stakeholder pensions might have been bought if their launch had been accompanied by a genuine and radical simplification of the pensions framework ~ ISA’s with tax relief and no annuity trap at the end of the day ~ but, as we see so often, the government focused on only one part of the picture without considering the rest, so stakeholder was bound to fail.

    And for all these reasons, NEST will never work. Unless you fix the reasons why something can never be cheap ~ it can never be cheap. Can it?

  14. Its a pity the BBC do not look at what we get in return for our licence fee and of course they dont have massive wages, bonuses and expenses do they? Its back to the old adage that good news is no news. The BBC does everything for nothing dont they. Just sensationalism.

  15. I can’t agree that there were any positive aspects to this programme. We face a very simple issue in the U.K. Not enough is being saved for retirement. Did this programme help? No. Did it focus on the positive aspects of pensions, i.e. the major tax advantages to contribution, and the increasing flexibility of pension products? No. Instead they chose only to highlight some over charged pension products and funds and some negligent advisers. By implication they tarred all with the same brush. If more people contributed to pensions, ceterus paribus, overall charges will come down. This programme is only likely to have the reverse effect.

  16. Never watched it myself stuck to professional masterchef and learned how to make Salmon mousse instead.

    To fill a half hour show at primetime you need to pack it full of juicy stories. Masterchef did that.

    Truth is pension plans have never in the main been better value but who is saving anymore??

    There are conmen out there hiding behind SIPPs/WRAPS and UCIS investments, there are also zombie with profits funds quoting returns of 7% pa whilst delivering zero for many many years.

    In simple terms a good advisor should now gain good clients to review what they have and where they are, want to go and what they may get!! A positive spin on a crock of sh%t!

  17. Are the industry people contributing to this type of programme so naive that they don’t realise their comments will be taken “out of context”?

    And to express charges as a percentage of contributions so that the better the plan has performed, the worse the situation looks is beyond crassness. BBC objectivity has obviously been consigned to the waste bin.

  18. Well you could make the same analysis with the taxes we pay and how much of that is wasted.

    You could probably make the same argument to many investment contracts as well.

    Did they mention the cost of regulation I wonder which increases year on year and has to be paid from somewhere?

    What about using the same argument with car tax, how much of that is spent on our roads and transport?

    Did they take into account inflation and what that would be over 40 years and how much in real terms these charges are?

    What purpose did the programme serve other that to put people off saving for retirment so is that really a good thing?

    Sensationism without real meaning.

  19. It was a dreadful submission of irresponsible scaremongering about an industry that is adapting to the needs of its clients and to remedy the needs of a nation. It simply does not help to deter young people off investing in their retirements with shoddy, inaccurate and simplistic reporting. There is a whole generation that is going to suffer through lack of pension planning. Scrap the licence fee- there was no public service on offer here from Panorama- again. Any clients of the cretinous ex-Army IFA who would like to have some decent advice from an advisor that understands the way investments work should shop around immediately.

  20. The BBC is an asset to society. Can we really say the same about IFAs?

  21. A typical “one eyed” attempt at yet another hatchet job on the industry by Panorama. They should have been putting out a positive message to their audience that an annual review of your pension with a qualified adviser is essential. This will then ensure that they are investing in the correct funds to meet their risk profile & the net performance of their fund(i.e. after charges) is on target to meet their objective at retirement. Panorama is unfortunately following the lead of the tabloids & like a number of them is past its “sell by” date.

  22. Whilst I accept that some of the content of the programme was taken out of context the underlying message was that clients should be reviewing their pension contracts. Isn’t that what we want? Thanks BBC!!!

  23. The BBC is complete rubbish. They rip us off and waste our licence fee on repeats and more repeats while they pay theselves fat salaries and pensions. Like the FSA, it should be broken up and put into the real world where they are not protected by a guaranteed income from the licence payer.

  24. Suzanne Lubenko 5th October 2010 at 4:02 pm

    Unfortunately, missed the programme. However, the producers seem to have followed a trend in the media seeking to show that investors are entitled to something for nothing where financial services are concerned. This is not reality in anyone’s world view!

    Secondly, living in the real world and, as part of my job, having met individuals who are just a few years off retirement age and have no other provision than the state pension, there is nothing more tragic. They will be old, vulnerable and poor. This type of programme which scares people and puts them off investing in a pension will not reassure these individuals that they have done the right thing in ignoring pensions.

  25. Like others, I missed the programme – my wife shouted to tell me there was something on the TV about Pensions, but I was listening to Show of Hands on the Radio, so no contest!

    Anyway, past experience has shown that if it’s on prime time TV, and it’s about any Financial sector topic, it’s going to be misguided, misquoting and wrong, so no thanks.

    The real culprits, to whom the anger should be directed, are stupid, ambitious and incompetent journalists, (which must account for around 95% of them) seeking headlines and reactions, and hey, guess what? They got them! Never mind the facts, they always get in the way of a good story don’t they?

    The bile directed at the BBC is however, also misguided. If the programme had been on a Commercial channel, it would have been the same crap, but with appalling adverts.

    I watch as little TV as possible, but I will only watch (and listen) to BBC channels, as I simply cannot, and will not abide or put up with stupid adverts. If the BBC is damaged or substantially diminished, we will all be the poorer.

  26. I missed the programme as I was having dinner with a group of investors who recognise that professional advisers and investment companies need to survive, and that what we do is, in the main, good for them.

    If my clients don’t pay me, I won’t be telling them about the impact of “Solvency 2”. When Panaorama deals with that one who will people run to?

    We’re easy targets, but our clients tend to love us. Our livelihood is dependent upon them being satisfied with the job we do. That really is the only judgement that matters.

    Were NEST charges discussed??

  27. John Shackleton 5th October 2010 at 4:08 pm

    So, if everyone did everything for free you would be better off!

    Compare pension charges with deposit interest you could earn if the banks also did not pay staff, have premises, pay bonuses and gave it all to savers as interest….then I think you would see an equal comparison and have some very frightening figures!!!

    In addition, I would have thought that the adoption of Solvency 2 wiping c 20% off money purchase income OVERNIGNT whilst BBC/ Public sector employees remain unaffected as the further cost will be picked up by the taxpayer….further decreasing the funds they have to make up the 20% shortfall would have made a much better story.

    A bit too complex (and close to home) for the old Beeb though!!

  28. Should someone tell the Personal Finance Society that Jeremy Vines, who hosted their awards dinner two weeks ago, has now done a hatchet job on the industry!

    I wonder who paid for his appearance fee – pensions providers perhaps 😉

  29. Panorama have done the very thing you need to do to get noticed, and make everyone very cross. That is to sit underneath the table at tea time and pull the tablecloth off. Try it, it’s wizard fun. You’re sent upstairs to bed and in the morning it’ll all be alright again. You’re unscathed, but everyone else has tea and scones and butter and jam and milk all over them, and a sizeable bill for clearing up the mess.
    Julian Stevens needs to do the sums on Allied Dunbar PPPs which I did. The total charges over say 20 or 30 years work out at around 3/4% of the fund. They were taken when the work was done (at the beginning) and minimal at the end. Compare that with a Stakeholder -1.5% of nothing at the beginning and 1% of say a million pounds at the end, when no work is being done at all (£10000 a year for doing nothing). As Michael Bentine observed it’s a square world.

  30. Stuart Rathbone 5th October 2010 at 4:19 pm

    THE COMMON LAW OF BUSINESS BALANCE

    When ever I see someone bleating on (which is all too often these days) about the cost of a product or service it reminds me of this:

    “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

    The Common Law of Business Balance. Widely attributed to John Ruskin.

    No one I know works for free and I for one will not provide a professional service with my name behind it for less than adequate fee.

    We are all responsible for our own choices & actions in life and there already enough checks & balances in the system to ensure that anyone willing to put in a bit of time & effort should be able to make an informed choice. If you are lazy and do not take the time to get a basic grasp of what you are doing you have only got your self to blame. This applies to all things not just what we do.

    Finally last time I looked no one is forcing you save for you old age, but that another story as they said on the riverbank.

  31. still have to say that masterchef was more enjoyable and the Beeb are just picking up on a story run in the Dailies front covers a little while back. Sh%t stinks and people notice it whereas good news just does not sell.

    wonder what I shall learn to make tonight – hope its something to do with apple crumble.

  32. Gentlemen,Gentlemen do not be overly concrened because one day you may well be a pensioner and have a more focused view.

    The operative phase is ‘When funds perform properly’ when it is established fact that many do not.

    The solution then is to prohibit funds from making charges until they have satified their obligation to policyholders. The world like the Finance industry will continue to spin, so have no fear.

    This would focus and drive up performance, or the operatives could seek employment as minio cab drivers.

    Unfortunately the Protector of Protectors hasd aleays been to busy protecting itself at public expense to address an obvious long term problem.

  33. Pension Charges are a rip off 5th October 2010 at 4:24 pm

    I really wish we could get some honesty on our industry. The charging structure of products is primarily complicated to hide hidden charges to provide profit to the adviser and enhanced commissions to the adviser. The BBC programme was really poorly made, but the point they make was a good one and true, the examples they used however was very poor.

    Product charges reduce returns. Its about time products and charging structures became fair for all.

    You lot on here are kidding yourself.

  34. It seemed like the program ran out of content and in the later stage switched to the De-Vere story which was more the realms of ‘Watchdog’ about rogue advice. I thought the program double counted charges for example the manufacturers cost is used to pay the advisers commission (distrubution cost is not free).

    As for comparing the British and Dutch cost of pensions I wonder if the Dutch have an ‘FSA’ and associated regulatory burden, sorry huge salaries and bonuses to pay.

    NEST has been ‘seeded’ with government subsidy so we don’t know what the cost of their pensions are going to be, but I do remember from the satkeholder fiasco that the governments own departments could not work within the cost constraints they expected of product manufacturer. It cost HMRC about 3% to transact tax rebates and they were not even trying to add value.
    Grrr….

  35. It was poor reporting on a subject that could have been ripped apart – fortunately for many readers here, it was an opportunity missed… Seriously, how lucky was the industry in this poorly reserached documentary? They didn’t even mention the additional AMC charges (1-1.5%) inside the underlying Funds attached to the life contract! This inclusion would have made their stated figures look truly horrendous yet more accurate in truth. A Get Out of Jail Free card was effectively issued to a very dodgy portion of the industry here!

  36. To the comment on the ex army officer now IFA. The idea of the program here was that a former army officer added credibility to what Panordrama was saying.

    Many in Her Majesty’s Financial Services are ex regular forces, being ex forces does not make your opinion right. Though by becoming ing ex forces you are at least allowed to exercise an opinion!!!

  37. @ Ian Wells.

    Its funny you should mention NEST. After 25 minutes of abuse aimed at highly charged pensions they then introduced the new “low cost government initiative”

    Funnily enough they forgot to mention the cost to the tax payer of this “initiative” so far.

  38. Andrew Buchanan 5th October 2010 at 5:16 pm

    It was perhaps a little optimistic of Tom McPhail to expect the BBC to present the whole picture; TV and radio journalists are not renowned for presenting all the facts, just the ones which suit their message.

    Out of interest I have just done an illustration for a stakeholder pension with a well known provider, for a 25 year-old male contributing £200 gross per month for exactly 40 years. With no commission (giving a 0.55% pa charge), total actual deductions come to £25,600, which is 26.6% of the £96k paid in, but just 5.9% of the projected fund at 7% pa growth (£435,000, which is over 4.5 times the amount paid in).

    With standard initial commission of £158.33 plus 0.2% pa fund-based renewal, which increased the annual charge to 1.0%, total deductions increased to £46,400, or 48% of total contributions, and just over 12% of projected fund at 7% pa (£384,000; exactly 4 times total contributions). This being the case I can well imagine that with some of the 1980s and early 90s contracts, before the days of disclosure, charges could easily get to 70% or 80% of total contributions.

    If the BBC thinks that paying an adviser £158 up front and 0.2% pa for what’s involved in recommending a stakeholder pension is too much then I am not sure how it thinks anyone is ever going to get advice on how to save for a pension and regular reviews (not counting the lucky minority who have access to final salary schemes), but I would be pleased to hear any suggestions it may have.

  39. I did see the programme and can see where the wee girl was comming from.

    Her mistake was to argue the point through a jaundiced viewpoint.

    Which in turn hurt the serious point the programme was attempting to address.

  40. Never watch Panorama. It is an example of senationalist journalism at it’s worst. No matter what they are provided with the choose to take out of it what that which fits their agenda and produce the programme witnessed by many.
    If Government want to ensure that people fund for their retirement (note I said fund for retirement not buy a pension – see GM’s comments above) then this sort of crass journalism should be dealt with as a matter of urgency. The sad thing about this is that I believe that Which and the FSA believe it!!

  41. Once again Panorama demonstrates how it has descended into sloppy sensationalist journalism. The same standard of poor journalism attacked the will writing industry a few weeks ago.
    Shabby BBC, very shabby.

  42. it wasn’t long ago that they portrayed every mortgage broker as bent in that “documentary” about sub prime mortgages.

  43. I must say I have been waiting so long for a programme such as Panorama to expose the UK pension industry.What a great pity the programme only lasted 30 minutes.A full 3 hours would have not been long enough for this topic. Mr Pitt-Watson appears to be the only one from the industry to break ranks and tell it like it really is.How has the industry been allowed to get away with charging UK investors far more than their European and US counterparts.I do hope Panorama is the first of many programmes aired to show this huge disparity.

  44. I thought it was a great programme. Pensioners have been the fall guys for the financial services industry for years and huge amounts of fees are stripped out inappropriately.

  45. Christopher Lean 6th October 2010 at 6:43 am

    Let’s face it, a story about a client visiting an Associate/Fellow of the PFS and getting fee based advice for a competitively charged pension product is not going to make interesting viewing.

    It is far more interesting to make a valid point about excessive charges, to get peoples’ interest, and then focus on a shady operation that in under investigation. They just showed the “dogs” but not the “stars”. Hardly balanced.

    However, I believe that any clients of professionally qualified advisers would not have been too disturbed about this programme. The problem is that those that have no pension provision or association with a good adviser will be put off saving for retirement.

    Maybe the ITV can do a programme about the cost to the public of the BBC pension scheme.

  46. having worked in the industry in the 80’s and 90’s, one can quite rightly say, that the industry has learnt nothing from the endowment mis-selling. Commission has been the root of the problem for the last 20 years, and the sooner the industry moves to a fee structure then the better our money will be looked after.
    It is no good complaining about the BBC when the financial industry has been complicit in their own problems.
    Pension investing is about the long term and finding assets that provide a constant income stream to meet the funds liabilities, and increase one’s money over the duration of the policy. You can have as many tax breaks as you like, but what is the point of investing when the commission hungry advisers are taking all the money from the pension pots.

  47. I thought Tom McPhail had been around long enough to know his comments would be used out of context.
    I have no doubt that Panorama’s figures were right and that 80% of contributions goes in charges. If we take the first £200 contribution they were talking about, as this would obviously suffer the highest charges, let it grow by 7% (the figure they were using) with an AMC of 1.50% (the figure they were using) for 40 years, the charges would total £435.36 which equates to almost 218% of the contribution. Sounds terrible until you realise that the original contribution has grown to £1795.95, after charges. And you think the programme was biased!

  48. Maybe the BBC should do a program about the cost of fee based advice ?

    If you think that the BBC were being sensationalist just wait until they discover that over a working lifetime of 600 months an IFA charging only 1% pa would be paid £3,737,374 by an investor saving as little as £1,000 pm and assuming 9% pa growth and that this is before ALL other costs ( Stamp duty, vat, platform charge…. fund charge….)

    I know that such a spin is hardly fair but it is not only the BBC who have difficulty with numbers

  49. Christopher Lean 6th October 2010 at 11:58 am

    @ John Blackmore.

    I think that there is a bit of confusion here. A fee based IFA charges an agreed fee, based on actual work undertaken and bills the client by invoice. Just as an accountant would.

    Any commission that would have been payable is left in the pension to reduce the costs.

    At no point does a fee based IFA get an ongoing 1% , or indeed any commission at all.
    That is the whole point of a fee based adviser.

  50. @ Christopher Lean

    No mention was made of commission. I do agree that fee ought to mean by invoice and for work done but how many IFA’s would pass that test ?

  51. I think you are all getting a bit hot under the collar and in your pants! You know the average pension pot is only about £ 28k – a fraction more than current average wage in the UK. You are unnecessarily flogging pension plans to those people who will end up with miserable pension in their old age! I would strongly recommend advising clients to invest in a proper investments – bricks and mortar. They will love you to bits when over the years the value of property goes up and they can see it, feel it and sell it and keep most of the proceeds. With pensions. who ultimately benefits? a smaller slice to the plan holder but the bulk goes to advisors and taxmen. Get real! did that before ay up from £ 5k

  52. The programme in my view was biased and showed a lack of essential knowledge from the supposed experts, you can find satistics to prove anything but this was simply the BBC scaremongering and essentially pointing the finger of blame at the wrong people!

    For example did you know that over a 40 year period allowing for increases in licence fees you will spend nearly £25000 funding a part nationalised bunch of fools who can’t do any type of research but love to give normal people the fear of a future in poverty, irrespective of how much you earn, we spoke to Jim who is a part-time lorry driver and this £25000 represents nearly 2.5 times his annual salary, so Jim how does it make you feel? “Well obviously if you put it like that then I’m not happy!”

    Trail fees, product fees etc are not going to go away just be renamed or redesigned in a different manner but as the BBC seem to fail to recognise that the trackers that they seemed to be advocating are representations of the market moving, the market moves with trades, the biggest traders are investment houses so without them effectively there is no market.

    Lazy journalism at its worst

  53. Its about time Pension Transfers was exposed, when working as an IFA, the amount of advisers, with not even an A Level or Degree to their sorry names, get a GCSE level qualification, and can make hundreds of thousands of pounds a year in commission just doing pension transfers was shocking. Back handers to clients in banks to refer colleagues was commonplace, as were earnings of £800k and compliance turning a bling eye, and yet still, the networks went bust. Most of these advisers seemed to relish in competing with each other on the buying the newest cars and homes – and sales managers just wanted to get the figures so they earn bonuses as well. Thats why I decided never to deal in Pension Transfers, and I hope consumers see this and complain going back 10 yrs plus.

    RDR – should come into effect in 2011 not 2012, so that these advisers see their income drop massiveley and cant keep up with the material posessions that bring them so much joy.

  54. Raj Patel – You should spill the beans to the FSA and stop inserting more imbalance into this heated debate.

    Yes commission has caused immeasurable problems but the ‘concept’ was sold by the providers, it is a ‘drug’ and they are the drug dealers, that is why the FSA wants to remove provider influence, the likes of Berkeley Independent Advisers, Berkeley Jacobs and Berkeley Berry Birch showed the regulators how unsavoury this business can be. Funny how many ‘Berkeleys’ there are among the cadavers littering the financial landscape!

  55. I do love these debates. Only for the nonsensicle rubbish that some people quote which makes me laugh and brightens my day. I must say Raj you take the crown today. After your rant I was gasping for oxygen and the open plan office in which I work thought i was having a heart attack.Just for interest can you give your opinion on banks, and in particular your views on bank bonuses. I can’t wait…nurse, nurse!

  56. Oh dear, how those sneaky, devious, underhand journalists seem to have upset the financial community – what a laugh!!!

    By the way, don’t assume that everyone is stupid if they do not buy the pensions scam anymore. I think you will find that a lot more people have just decided to make other provision for their old age – or in the case of certain segments of the population have simply decided they will be better off to live for today – for tomorrow the state will look after you better if you have not saved anything.

  57. I watched the program and it was a bit silly. The point they made on charges regarding HSBC/Co-op and L&G were probably valid as these were high charging contracts. It also made some good points about fund managers churning portfolios to make commission and how this increases charges.

    I thought that the poor blind guy who had been ripped off by the Devere associated advisers didn’t really have anything to do with pension planning in general.

    It could have had a bit of balance with somebody who has done well out of a money purchase pension.

    If however it means that some people will now think “I need to do something about my retirement” and actually do, then this is a good thing. If they don’t want to use a pension, I’m sure some other recomendations could be made!!

  58. What the programme highlighted was:-

    -What proportion of the earnings from the investment go to the “I”FA as opposed to what proportion goes to the client
    -that the remuneration of commision based advisors is hidden from all but the most inquisitive clients

    In my opinion these so called “I”FA’s are commission salesmen in disguise. This is why the FSA have banned the practice from 2013.

    A bit sensationalist? yes. A bit newsy orientated? yes. But a great programme if it makes people aware of the pitfalls facing people looking to set aside funds for retirement.

    There is an opportunity to have a series of fact based programmes coaching people on how to invest wisely. Well done BBC!

  59. Hargreaves Lansdown’s not compliant advice 6th October 2010 at 9:03 pm

    Hargreaves Lansdown’s operate a execution only service for complex pension planning transfers and SIPPs. I wouldlove to know how they get that one past the FSA? Or are the FSA still asleep on their watch?

  60. So Steve Wickens what are the charges on the ‘other provision’ that people have made?

    I think you will find that have evolved over time and yes some pensions are expensive.

    However, I think you will find that over a persons working lifetime the charges on mono charged stakeholder plan will be in excess of the charges on ‘expensive’ plans.

    It is also interesting that people seem to think that advice is free.

  61. I’m surprised that no one picked up on the following point – the article is not original. It is a rehash of an article (no an entire campaign) that the Daily Mail undertook laast year. It even uses the same calculations and singles out the same firms:
    http://www.dailymail.co.uk/money/article-1226722/Put-10-000-pension–lose-70-000-charges.html

    So the BBC has just rehased someone else’s work

  62. It was also interesting to note that running the same calculation (on the same FSA/ CFEB tables) for a stocks and shares ISA led to a charge that was often 60-80% higher than for a pension plan. So why were pensions singled out instead of fund management charges on all products? They were simply looking for any bad news story instead of informing people about outrageous charges.

    Have a go yourself here on both products for the same term and contribution level and see which is cheaper.
    http://www.moneymadeclear.org.uk/tables

  63. Frank O Donnell 8th October 2010 at 9:51 am

    Lets put this all in context the people who have paid this money into their pensions are not getting what they expected, years of underperformence with charges irresepective of perforrmance is totally unacceptable.

    The people who are responsible for the performance of the investments should be having a good look at themselves

  64. Reply to Evan Owen,

    Q: Do you think any transfer paying a six figure sum in commission to the adviser a) Warrants the hours worked on it and b) the commission come from the providers own bank account? – NO is the answer to both and its the CONSUMER that pays this in some way or form.

    ive been an IFA for 15 yrs, the amount of under-educated spivs that currently work as Pension transfer specialists made me puke. A total lack of care and duty to the client and the funds transferred were from the frying pan into the fire.

    dont lecture me, RDR will clearly sort the scum from the quality and no wonder networks are having to review pension transfer cases.

    Clearly another commission hungry IFA with no morals commenting. The industry needs to change with regards to paying of huge commissions for what can essential be seen as less than 24 hours work.

    If IFA’s dont become more professional with fee charging, they will die a slow and torrid death.

  65. Anonymous | 8 Oct 2010 9:51 am

    Lets put this all in context the people who have paid this money into their pensions are not getting what they expected, years of underperformence with charges irresepective of perforrmance is totally unacceptable.

    The people who are responsible for the performance of the investments should be having a good look at themselves
    —————

    Don’t forget though that it is the individual’s own choice on where to invest the monies – not that of the pension company which is not authorised to give specific financial advice. If you ask your personal pensoin provider where to put your monies they cannot tell you what to do.

    I’m in a fund that has returned around 150% over the last 5 years, despite the credit crunch. Yet there are other funds that have done better than the one i am in.

    In my experience most people do nt ever monitor their funds (but are happy to complain about poor performance). If on the other hand the company only offers a poor selection of funds – leaving teh member with little choice -then there may be gorunds for feeling aggrieved.

  66. “Do you think any transfer paying a six figure sum in commission to the adviser …”

    Transfers paying six figure sum in commission?

    Sorry, Raj, thats just rubbish. A little less venom and a little more accuracy would help.

  67. Raj Patel says “Thats why I decided never to deal in Pension Transfers, and I hope consumers see this and complain going back 10 yrs plus.”

    You’ve failed to advise clients to transfer older, more expensive policies to more modern plans? You’ve failed in your duty to give Best Advice.

    You refer to “the amount of under-educated spivs that currently work as Pension transfer specialists made me puke.”

    I wonder when you will be sued for negligence in not moving clients. You seem to be stuck in the late 80s, Raj.

  68. George Emsden (cancerIFA) 9th October 2010 at 9:55 am

    “The BBC is an asset to society. Can we really say the same about IFAs?” Anonymous-If your comments are so valuable, why the anonymity? What are you afraid of or is this just a wind up?

    Editor please – the original comment is just a general piece of spite. Anonymity is fine where specific data is concerned but why have it for mudslinging like this?

  69. George Emsden (cancerIFA) 9th October 2010 at 9:58 am

    John Blackmore. Commission was actually mentioned in the programme as being unlawful after 2013

  70. George Emsden (cancerIFA) 9th October 2010 at 10:08 am

    Well said Mr Manj about rehashing someone else’s work.
    Curious why SJP was not mentioned. Perhaps it’s because they are owned by a BIG bank and the beeb are afraid of what their lawyers night say? Bit like making a programme on the history of England and leaving out the Norman conquest.

  71. I don’t know why anyone,s surprised, the BBC has had no journalistic integrity for some time, I’ve learnt a long time ago that balanced reporting is an unknown concept in the BBC.

    Just another reason why financial journalism should be regulated by the FSA. We wouldn’t be allowed to do this piece and the general gutter press shouldn’t ba allowed to either.

  72. Panorama has taken 12 years to confirm one of our stories. They also failed to state that the biggest “take” was by Gordon Brown when he breached pre-1997 pension contracts by taxing dividends. As an adviser I invested in Wines and have outperformed EVERY pension fund!!! And even if the value reduces I can have a great drink!

  73. George Emsden (cancerIFA) | 9 Oct 2010 10:08 am

    Well said Mr Manj about rehashing someone else’s work.
    Curious why SJP was not mentioned. Perhaps it’s because they are owned by a BIG bank and the beeb are afraid of what their lawyers night say? Bit like making a programme on the history of England and leaving out the Norman conquest.
    ——————

    There is a very simple answer to this. Like i said the BBC did not calculate their own figures. They simply copied those from the FSA/ CFEB tables. Since SJP refuse to participate on these tables their charges would not be known by the BBC (or Daily Mail for that matter) as they never performed their own calculatoins or commissioned any other party to prepare the figures either. From what i recall Skandia Life also do not participate on the tables either

  74. was the programme perfect? No, it wasn’t. Did it make a lot of important points, yes it did and while the parts that made me cringe consisted of both fair observations about aspects of the industry and also wrong ends of the stick, both are the responsibility of the industry. If we want to clean up the industry we should be the ones cheering loudest when the likes of PCD are outed. And if we want people to trust the industry then more transparanecy is needed so the likes of Penny can reach all the right conclusions. Anyone in the industry criticising the programme needs to take a long hard look at themselves – if people stop buying pensions it’s the fault of the industry not advisors and the biggest disappointment is the lack of recognition of that in the responses on here. Well done, BBC and Penny Haslam for getting this out in the open.

  75. I am not in the industry ,but have just confirmed that I am entitled to make my comments.I did watch Panorama and to say I was not amused would be an understatement.My experience with pension products have not been exactly great.First of all I was mis-sold my pension by a well known provider many years ago.I accepted compensation never knowing for one moment that I would be indirectly paying for my own compensation via the plundering of the inherited assets.Next my husband has a pension with another well known provider.I found a catalogue of errors going back a decade which they were never going to own up to .I thought it would be only fair to have all the charges returned plus lost growth as they had placed him in the wrong fund and the wrong plan for the first five years.The provider refused.I welcome your comments.I have been making the investment choices for my husband for quite some time.Am I not entitled to some sort of a rebate on behalf of my husband.How can I be doing all the work and someone else get the charges.I look forward to a frank response .

  76. 7% of the TV licence goes straight into the BBC pension. If we are talking about pension charges that is one hell of a big pension charge. Panorama is a shadow of its former investigative self and downmarket reporting like this just encourages the great british public to do what it always does best ….nothing!

  77. I have been a Financial Adviser for 17years, the BBC have taken all pensions and painted them with the same brush, for those of you who know how modern pensions work I need not explain, for those of you who don’t you will not get advice for free, nor will companies invest your money for free, the ones who are winging about sour grapes are those who took a pension out 20 years ago for £20 a month and expects the Earth, Wake up, the biggest problem in this industry is compliancy on both sides, big insurance companies elect not to advise their clients that there pension has made no bonuses for the past 10 years and they should seek Independent financial advice, while the customer chooses to ignore their statements each year, as for the BBC’s portrait of pension funds, yes some of them are expensive while some are very cheap but the truth of the matter is you get what you pay for, and if you are lucky enough to have an IFA looking after your pension you are probably getting regular advice regarding risk and fund choice and your pension will be performing as well as it can given the state of the market in recent years, if you don’t have an IFA the fault is all yours, again if you still have an old pension pre A day with one of the old established insurance companies you are probably getting ripped off or even worse if you received notification your old pension provider has merged or changed its name your on to a looser, as for pension transfers this door will close shortly and those of you who don’t act will be left with your old crappy provider and nowhere to turn, I regularly transfer pensions and I take pride in the advice I give and believe me I have seen some diabolical pensions in my time and it would have been disgraceful if I had left them alone.

  78. Lesley

    The first issue that you describe relates to the Prudential. Moreover it was deemed legal for them to take this approach. The only way that this particular issue would have got resolved is if the Treasury Select Committee got involved. Well they did get involved but they did not force the Prudential to pay the monies back. So i don;t think that money will be see again.

    As for errors the general principle that an Ombudsman will follow is that if an error has been made then the individual should be put back in the position that they would have been in had no mistake occurred. Other than that an individual may get a small distress payment. But to refund all charges plus growth is not going to be considered by an ombudsman. there is nothing to stop the company themselves offering this option but in practice i can’t see it ever happening!!

    Also you asked for a frank response. There is no way you do all the work on the scheme! Did you register it with HMRC? also, as quick examples, do you:
    – draw up the scheme documents?
    – complete returns to send to FSA/ HMRC?
    – collect contribtuoins?
    – ensure the scheme meets its legal/ compliance requirements?
    – set up a insured funds for investment?
    – are you the fund manager for each fund and do you complete the returns for each fund?

    There is no way you do all this – the insurance company will. In any event HMRC prohibits an individual from doing such roles and so this scenario (i.e. you doing all the work) can never apply.
    http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm02102000.htm

    If you’re not happy go to an ombudsman for an independent review. it is too difficult to advise on blogs.

  79. Anon-Thanks for your response,I may have not set the whole thing up as you claim.However it was me and only me that spotted it had been set up incorrectly from the outset.The IFA did inform the insurer that the plan and the fund were incorrect,but there was no follow up .They sent my husband out statements for the following few years showing incorrect higher charging plan and fund choice.It was only when I scrutinised this pension I found the errors.How many people are paid and paid handsomely for getting it all wrong.Next you mention contributions and of course I did not set these up personally,but guess what who was it that spotted they were going to the wrong account,yes me again.I reiterate nice work if you can get it and for getting it all wrong.

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