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