Highclere Financial Services
Yes I think it will for certain types of client. In a relatively simple scenario in terms of where someone has reached retirement age and the discussion of how to go forth, whether it should be an annuity, etc, if it is someone with a pension fund of £50,000, then the question kind of answers itself to some degree.
When it comes to, say, someone aged 40 earning £150,000 who already has a pension pot of £100,000, then his choices are going to be not only wider but he will likely be more aware of his options. He will want to have a strategy put in place designed around his current situation and reviewed on a regular basis.
There has to be a recognition in the RDR and the industry in general and within the regulators that there is not such a thing as a pension planner
For that later scenario, you need a far greater awareness than you do for the first one. In a way, this is part of the problem with the RDR – it assumes that everyone does everything and that is not the case. A chap came to me the other day and he has £300,000 in three pension pots, so he wants advice on annuities and so forth. I am very happy with that and I am There has to be a recognition in the RDR and the industry in general and within the regulators that there is not such a thing as a pension plannerdealing with it. Another chap came to me and he has £120,000 in preserved benefits with his ex-employer and I passed him across to a guy who can deal in pension transfers. I am not allowed to talk to you about it, I can’t even offer a viewpoint.
If I get someone who appears to be very complex or may or could require advice outside my remit, then I will pass it across.
For this type of business, I deal with the simpler cases, partly because I don’t find pensions that interesting. But there has to be a recognition within the RDR and the industry in general and certainly within the regulators that there is not such a thing as a pension planner.
There are varying types, there is a very indepth chap and there is a basic chap and the knowledge I need for assisting a typical client with a pension pot of £50,000 to buy an annuity is not what I need for the other business. Unfortunately, the regulator does not see it that way.
If I could design my perfect business model, say, there were five people in my business, I would specialise in protection, someone would do mortgages, someone else would do pensions, someone else would do investment and someone would taxation or overall planning. That would be perfect because we would share our clients and we would integrate our advice.
The reality is that firms do not work that way, what they tend to do is maybe turn business away or pass it across to someone else. What I don’t need to do is take three or four examinations to do something that forms a small part of my business.
If the advice is straightforward, the general IFA can deal with it. When we talk about retirement planning, yes it is going to get much more complicated but it already is complicated.
When all the changes happened this year in terms of pensions and the tax rates for higher earners, I thought it was completely woeful because it affects huge numbers of the clients that we advice who are still working.
I was thinking, what on earth does one do for these clients in terms of advice? And you realise that you can’t have a blanket solution, it has got to be each case looked at on its merits because it depends on what other assets they have got, what their plans are, what their plans are for those assets and the When all the changes happened this year in terms of pensions, it was woeful because it affects huge numbers of the clients that we advice who are still workingwhole thing becomes really complicated.
When all the changes happened this year in terms of pensions, it was woeful because it affects huge numbers of the clients that we advice who are still working
That kind of top end retirement planning already has become a specialist, it is specialist financial planning and specialist investment advice you are giving at that stage, and I include Sipps within that.
But let us not lose sight of that fact that the best ann-uity rate may well be the extent of the planning that is offered or appropriate to them.
It depends on what range of clients you are dealing with and what their scope is in terms of their wealth. You can’t come down and say it definitely going to be one way or the other, I think it depends on how complicated the client’s needs are.
I hope it is true that if any IFA feels that something is outside their remit that it is passed on to someone who can deal with that.
The problem with IFAs is that we are all trained to be really helpful and we all want to help the client out. Maybe passing on will become more prevalent but I don’t think it is that prevalent at the moment.