The financial services industry was also conference hopping en masse, joining in the “will he, won’t he” speculation. Well, Gordon’s put us out of our misery now, of course.
But back to the conferences. This year, IMA decided to debate the hot topics of financial capability at the Liberal Democrat and Labour conferences and annuities at the Conservative conference.
At the Labour conference, economic secretary Kitty Ussher made it clear that any generic advice scheme, which would ultimately benefit all – government, the industry and individuals – had to have full and wide industry backing for it to succeed. And crucially that included funding.
IMA chief executive Richard Saunders cautioned against funding through an industry levy, which would just be seen as a tax, and instead made the case for a voluntary approach through a well-costed business plan with clear objectives and measurable success criteria. He argued that that would be more likely to get the industry’s further support. That the industry is supportive should not be in doubt, however, as evidenced by the number of meetings on the subject and debates around how such a service should and could be delivered.
Speaking at the Liberal Democrat conference, Danny Alexander MP focused on debt and again made the case for a partnership approach between government and industry in the provision of advice. He highlighted the importance of financial education in schools, particularly the need to teach budgeting and money management to young people.
Finally, at the Tory conference, we launched our case for a reform of the annuity rules, which we believe may not always give those in retirement the best deal. We propose that the requirement to buy an annuity at age 75 be replaced with a more flexible system, giving people choice as to what they buy with their pension savings. For some an annuity may be the best option, for others it may not. Shadow treasury minister Mark Hoban agreed with the case for reform.
Another hot topic, for the second year running, was the whole personal accounts debate. Who should be auto-enrolled? How will people know whether or not they should remain in or opt out? What kind of advice should be made available? These and many other questions were debated at length.
It was encouraging to hear Mike O’Brien, the pensions minister, admit that they would not be able to claim the scheme was a resounding success if it simply spread existing levels of saving across a bigger group of people. The government very much sees the aim as encouraging more people to save more for their retirement.
All in all, a good mix of topics were debated and we will be moving into the next phase of pension reform and financial capability in the coming months with a second Pensions Bill and a proposal for the delivery of a national generic advice service.
Mona Patel is head of communications at the Investment Management Association