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Aviva’s McQueen: Pensions industry must improve trust with public

Alistair McQueenThe next decade will make or break the reputation of our industry. Our clients need us to make it. This period will see a record number of people entrusting us with their hard-earned money thanks to automatic enrolment.

More than 10 million people have now been introduced to a workplace pension since 2012, trusting us that it is the right thing to do.

The period will also see a record number of people reach retirement. Indeed, I estimate we will see almost 10 million people retire, with more combined wealth than we have ever witnessed before.

Beyond these big numbers, many will also be pioneers in the new lands of the pension freedoms.

In 10 years’ time, we will be judged by how well we have helped people. And we deserve to be judged. After all, it is our clients who pay our wages.

Our responsibility is significant. Private pensions represent the biggest single source of private wealth in the UK, at more than £5trn. Our management of this money is critical to the wellbeing of millions of ordinary people.

And it is critical to the future of the UK as a whole too. In short, pensions may be sexy for few, but they matter – a lot – for all.

Our responsibility comes at a time of challenge. Putting to one side the choppy waters of Brexit, Donald Trump et al, we have a population crying out for help.

The government’s own figures report that a minority of people – 43 per cent – feel they understand enough about pensions to make decisions about saving for their retirement. This figure has not shifted in a decade.

This also comes at a time of a growing advice gap. The FCA has reported that 4.5 million people received regulated financial advice in 2018, which might sound like a big number, until we remember there are more than 50 million adults in the UK overall.

At a time of record need, regulated advice has become a rare good for a lucky few. We need the advice gap to close.

The FCA recognises this advice gap and is in the midst of evaluating its RDR and the Financial Advice Market Review.

Have the RDR and FAMR really been a success for the advice market?

The latest review is timely and critical, and by all evidence, the regulator’s work is far from done.

Trust is a rare commodity in our industry. Our research shows that the sector languishes beside the media and the government in the foothills of the trust mountain.

Yet millions of people are looking to us, the media and the government for help. We need to build up levels of trust.

By succeeding in the next decade, we can positively transform the lives of millions of people in the UK. We cannot let them down.

Alistair McQueen is head of savings and retirement at Aviva

You can follow him on Twitter @HelloMcQueen

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