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Development focus: Don’t bury your head in the sand

Advisers need to make themselves the “go to” next step for those coming away from their Pension Wise sessions.

Stuart Wilson Peach 250x255

The introduction of pensions guidance has thrown the proverbial cat among the pigeons when it comes to its provision to consumers and how it sits within the whole framework of advice. This is particularly pertinent for those who consider themselves later-life advisers and one can understand why they look upon the world post-April with interest.

There are two ways  later-life advisers can look at the changes. First, they can choose to put their heads in the sand and hope the changed advisory landscape will have no impact on their business, allowing them to continue to function as if nothing had happened. Or they can embrace the changes that are coming, take ownership of them and place themselves in a position whereby they become the “go to” for those coming away from their Pension Wise session.

It will not take a genius to work out I believe the latter option to be the best one to take. Indeed, let’s embrace the delivery of guidance and develop ourselves and our propositions to be the natural next step.

One thing is quite certain: guidance will provide information and support but it will also raise questions for those able to access their pensions for the first time. Given the mainstream media’s obsession with the option of drawing down the entire pension in cash, it should be the advisory community that leads the way in providing education, offering options and, let’s not forget, delivering recommendations.

If we can accept these changes for what they are, then it seems obvious to have a proposition that can cater for a far more holistic version of retirement/later-life advice than many advisers currently offer. To take an example, many equity release advisers just provide equity release advice – while they will take into account a variety of other options and product sectors, they are not currently providing advice in those areas.

The key, therefore, is to develop the scope of one’s service; to make sure you have expertise and knowledge of a variety of product areas likely to be needed by new pensioners. If you do not have this information at your fingertips, then you will certainly need to be able to introduce to, or access, those that do.

This type of holistic retirement planning will be much more in demand because guidance providers, while covering a wide range of potential options and alternatives, will not be giving recommendations. With this in mind, is the newly-retired individual, engaged by the guidance they have received, going to be looking for a specialist in one product area or are they going to want someone who can advise across all their current and future needs? My guess, again, would be the latter.

This is why we have, first, developed the Academy and, second, looked at how we can help our member’s position themselves in the post-guidance space. It is the reason behind our “guidance-plus” proposition, which supports advisers in developing, for want of a better phrase, a “pro bono” initial meeting option for those straight out of guidance followed by a more comprehensive advice proposition further along.

Training and development at an individual adviser and firm level will be absolutely vital if these new pensioners are to be converted into advice clients. We have also recognised the need for strong commercial relationships across many different product sectors in order to marry up education and training with product and provider access.

All in all, this is a hugely exciting time to be involved in the later-life space. It will require a significant amount of work and resource but those that can manage it will be best placed to make the most of the opportunities undoubtedly set to present themselves from 6 April. Now is certainly not the time to bury one’s head in the sand but a chance to train and develop in order to deliver a compelling proposition that will stand you in good stead for many years to come.

Stuart Wilson is managing partner at the Later Life Academy 

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. All very reasonable but it misses the main point by a country mile, i.e. people with small DC pots can’t afford to pay for the traditional style of high-touch, on-going service. The real winners will be those that can deliver helpful, one-off services at a substantially lower price-point.

  2. The article mentions that it may take a significant amount of time and resource to be involved in the later life space, I have neither, but have spent thousands of hours obtaining qualifications that should enhance my advice.

    My point is that has to be paid for, there is a danger that many pro bono meetings will lead to nothing, and with no cross subsidy permitted, it is not commercially viable for me to take the risk, client referrals are 100% take up and provide long lasting new clients.

    Maybe the answer is that these lower end clients can be served by lower end advisers, supported and subsidised within a larger practice, which can absorb the costs within their structure. Small firms have to be profitable to survive, and decide what their business models are to achieve that.

    Yes, there are always great opportunities when rules change, just as with auto enrolment, and some firms will be able to capitalise better than others.

  3. While I’m all for getting up to speed wih the changes to properly advise good existing clients, chasing folk emerging from the “guidance” system will I suspect, be rather like chasing the mist. Lot’s of effort and potential liability, with little to no return. Enjoy.

  4. @ Geoff Sharpe – I agree with you. I have LTM and LTC qualifications and yet have only done 3 LTM mortgages in over a decade and about the same LTC I thin. The risk of advising on this sort of business as an IFA outweighs th e price point I feel able to charge a client due to the lack of any form of longstop (i.e. infinite liability and when it may be the estranged child of the deceased who brings a complaint)
    I have an apprentice I would happily let loose on these cases (he is qualified to advise on LTMs, but is consciously incompetent with regard LTMs at the moment)
    For PensionWise, the FCA need to get their head around the fact a large proportion of advisers (lie myself) who would happily undertake less profitable or even pro-bono work when passed small cases via PensionWise, simply cannot RISK doing so due to the perception that FOS is out of control.
    It matters not whether this is perception or fact as the perception is a fact and I suspect Networks are even LESS likely to grab the nettle than small forms like mine who may be tempted to try and help and then actually come back to reality of the risk to the firm and it’s employees of just one unsubstantiated complaint going to the FOS at a time in the dim and distant infinite future.

  5. @Phil – it may as you quite correctly say be perception or fact (no one knows), but in the absence of clear confirmation from the powers that be, why on earth would anyone accept such a long term potential risk for no return.

    I seem to recall (although I might be mistaken or out of date on this) that even the CAB provide Indemnity cover for their “advisers”, suggesting even they take the view there’s some risk to them.

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