Editor’s note: Hope is not lost for the closed-book world

Justin Cash, Editor of Money MarketingI have never used a fax machine. Nor, I suspect, have the vast majority of people who, like me, are under the age of 35. Some of my peers report only ever having used them “for fun”.

However, in the bizarre world of pensions, this is exactly how the company that manages your money could ask your financial adviser to get in touch with it.

Understandably, advisers who are now armed with platforms they can access valuations from through their phones, and back-office systems that allow them to track workflows from around the world, can rarely understand why such Luddite practice persists. Yet, persist it does among the increasingly rare but no less influential group we call closed-book providers.

The reason advisers can get frustrated is because their clients can too. What kind of financial planner are you if you can’t even tell me what my pension is worth, let alone what I should do with it?

However, as our cover story this week examines, all hope is not lost for those planners and their clients. Quite the reverse in fact.

Let’s take legacy books’ paper-heavy, backward-facing technology for a start. Of course, companies like Phoenix couldn’t be trusted to get their current IT upgrades right first time round. But at least they are throwing millions at it. The pensions dashboard, if we ever see it, will take valuation delays out of the equation, and force further systems upgrades on providers.

Are closed-book providers finally moving into the 21st century?

Phoenix, incidentally, is also innovating by allowing savers with small pots to cash out, reducing the breadth of other policyholders higher value clients – and therefore those most likely to be advised – should have to compete with for service.

Moreover, with the acquisition of Axa Wealth’s pensions and protection business last year, it became part of a trend towards consolidation that, theoretically at least, should generate much-needed economies of scale in a part of the market that can only get smaller, extending the useful part of its life.

Undoubtedly clients will find clunky service irritating, but we should not rush to judgment to say that the closed-book industry has caused widespread consumer detriment.

Of the six firms the FCA began reviewing in March 2016, as of June, the regulator has found insufficient evidence for taking any enforcement action against two of them: Scottish Widows and Police Mutual.

While it has yet to rule on the rest, I think most in the market would not predict significant sanctions, and that, while they weren’t perfect, most of the old products people were in did, at least for a period, offer passable value.

With more guidance from the regulator coming out of that, and other reviews concerning non-workplace pensions in the works, the closed-book world has every incentive to offer advisers a brighter future.

Justin Cash is editor of Money Marketing. Follow him on Twitter @Justin_Cash_1



Employers pour cold water on financial advice for staff

Employers do not believe investment in financial advice would benefit their employees, research has found. Findings from Chase de Vere and research provider Lightbulb show fewer  firms are willing to prioritise advice compared to last year. The joint survey asked employers to consider the value of advice, the involvement of firms in assisting with retirement […]


Blog: Why continue to line the pockets of fund houses?

Insurance companies and wealth management firms have always put their financial gains and interests before that of any client. Why wouldn’t they? They are in business to make a profit. The reason they have long promoted product over service is that layers of costs could be built into them. Up until the RDR, these costs […]


Phil Bray: How to improve your adviser blogs

We regularly see headlines pronouncing the death of blogging and promoting video, podcasts or other forms of content as an alternative. The irony, of course, is that those making the predictions are doing so in a blog. Nevertheless, the question remains valid: is blogging dead? I am confident it is not but its effectiveness will […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com