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MM leader: The not-so-isolated case of Pension Wise failings

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

It is often very easy for organisations to hide behind the excuse that when something goes wrong, it was a one-off failure. To suggest anything else would be tantamount to admitting wrongdoing of epic and endemic proportions. Suffice to say, this is not companies’ preferred PR route.

Sometimes though, stubbornly sticking to the mantra that misconduct was “just a one-off” can backfire spectacularly. Just look at the so-called “rogue reporter” that ended up bringing down the News of the World.

When Money Marketing first reported a Citizens Advice delivery centre was using Pension Wise staff on work unrelated to pensions, we were given the “isolated incident” line. In a mere matter of weeks, another case has resurfaced.

We reveal this week that one Pension Wise employee has been dismissed from the organisation after he challenged management on the rollout of training that was not specific to pensions.

Citizens Advice says the programme was about giving guiders more rounded training. Its argument (paraphrased) is Pension Wise guiders do not have much to do right now, so should be trained on services unrelated to Pension Wise. Training was never about redeploying staff, they say, but to give employees better overall knowledge. They were not going to use this knowledge, you understand. They would simply refer consumers to the people who knew about the subjects they had just been trained on. A convoluted argument if ever there was one.

So why does all this matter? Firstly, it matters because of the £4.7m cost being incurred by advisers to fund Pension Wise. The funding premise behind guidance is that firms which expect to benefit are expected to pay. But what benefit is there to advisers if the activities Pension Wise staff are carrying out are more closely allied to debt, unemployment and benefits rather than pensions and advice?

Secondly, whether it is additional training or full-scale redeployment, the root cause is clear – consumers are not using Pension Wise to anything like its full capacity. What does that say about the service supposed to be underpinning pension freedoms?

Thirdy, there are questions over whether Citizens Advice – with its sprawling network of independently run charities – is the right vehicle to be delivering guidance.

I was told recently that in certain industry circles it quickly became clear following the Chancellor’s “Budget bombshell” speech that pension freedoms had been devised “on the back of a fag packet”. The role of Citizens Advice so far in pension freedoms does nothing to dismantle that perception.

Natalie Holt is editor of Money Marketing. Follow her on Twitter: @Natalie_Holt_MM 



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There are 21 comments at the moment, we would love to hear your opinion too.

  1. I have to say that I find this a very strange article. What was the training? and to suggest that having knowledge about the difficulties people face in retirement (such as Debt or impact on benefits) is a bad thing is a very blinkered approach.

    Surely having that knowledge (and knowledge of wider support available) will strengthen a service and make it more robust. Would you really prefer the staff to sit and do nothing?

    Rather than continually belittle a new service, why not look at the positives of having a more empowered generation of retirees.

    • I do not find this article strange. It is the job of government to create employment. Over the years we have seen a new service been developed called consumer protection and thus Regulation This is quite often funded by a levy on the industry. Put bluntly it is a tax on companies.
      In the case of Pension Wise the treasury has instructed the FCA to raise circa 39 million by way of the said levy.
      Which is not an insignificant amount of money.

      I am not against pension wise and I feel that it has a structure within the new philosophy of pension freedom. What I do question is how this money is being spent on delivering the outcomes.
      I actually find it astounding that people in charge of government funded organisations are paid six figure salaries plus additional benefits I also question is the £18,000 salaries. When you compared what I believe is the starting salary employees of Pension Wise to other sectors in the service industry . One should question why they have to be so high.

      Money Marketing has every right to question how the money is spent especially when the resources that are used the subsidise the funding within charitable organisation such as CAB

  2. @ Ms C H. Therein lies the problem. There are no positives of a more empowered generation of retirees. 10% take up on a brand new service is woeful, truly woeful. It would be interesting to know the truth about how many of the 20,000 actually took a different course of action to that which was in their head because of the guidance received at the appointment. My gut feeling is the answer would be very very few. However that is a separate issue. The money given to CAB from the providers, advisers and treasury was SOLEY for the use of pension wise business, nothing else. It most certainly was NOT to increase their knowledge of other supports services within, nor was it to subsidise the CAB for using these people in other areas outside the whole pension wise Raison d’être. To me this is so typical of what any organisations who get “grants” in the form of other people’s money and the civil service mentality of use or lose the budget kicks in. They fecklessly spend the money in any way the can dream up purely to protect the following year’s budget and then beg for more to say it wasn’t enough in the first place.
    The concept of pension wise is great but like nearly all governmental concepts, the delivery of same is appalling. If MAS had been given the project it would have been just as big a disaster.

  3. When we had flexible drawdown with a minimum income requirement, there was deemed to be
    no need for a Pensionwise service. Now we have dispensed with the MIR safeguard, with the consequence that a Pensionwise service is deemed necessary. Lo and behold, the removal of the MIR is seen as a weakening of the UK pension system and the Pensionwise service is hardly doing as was intended. You would almost think those who invent our pension rules deliberately create these problems so that they can invent more rules to solve them.

  4. Mrs CH – I would prefer that the staff are doing what I and other advisers are paying them to do.

    • Andy Robertson-Fox 5th November 2015 at 12:06 pm

      You mean sit on their backsides playing computer games and twiddling their thumbs while waiting for a client?
      Far better to take the time available to broaden their knowledge on those other closely allied financial matters and be of some use – perhaps in relation to those self same clients.

    • And I am sure that the PW staff would be too.

  5. Is there any truth in the rumour that Pension Wise staff sitting around with nothing to do came up with the idea for that stupid Monster thing promoting work place pensions?

  6. Ms C H whilst your thoughts may have merit the bottom line is these staff were taken on, and paid for by a levy on the industry, to provide guidance on the pensions options at retirement nothing else.

    If they want them to provide ‘guidance’ on anything other than the pension freedoms they should be paid for from general taxation.

    • Andy Robertson-Fox 5th November 2015 at 1:13 pm

      So I have a client booked for an appointment at 9.00am, another at, say, 11.00 but the next one is not until 16.00 hours as my 14.00 hours appointment cancelled mid mornıng….what am I going to do who is going to pay for what?

    • I agree with Sean. Whilst they should do something useful with their time if they are not being fully utilised. What they are doing is worthwhile to society, but not the piper/bill payer. As Sean implies this is NOT what the people paying for it were told it was to be used for.

  7. He who pays the piper and all of that….! I think it is absolutely right that the firms and individuals that are ‘compelled’ to fund PAS should vent their spleen when they see an abuse of their funding (not that it makes a difference as they will still have no say in things). People, moreover clients, need to know who is picking up the tab for these governmental vote-winners.

    No matter how laudable the concept of more rounded training for guidance staff may seem, it all costs money and we are paying for it (governmental assistance/funding is only by way of a ‘loan’ system if memory serves me correctly!).

    As for the point about training staff in benefit and debt-related issues, I would have thought that this would be a principle part of the basic induction course for the pensions guidance service anyway.

  8. To give Mrs CH ( not my wife, I hasten to add) the benefit of the doubt, and I partly agree, its better that some-one uses the spare time to diversify into other areas, rather than sit twiddling their thumbs, (here comes the however) what really creams my corn is NOT AT MY AND MY CLIENTS EXPENSE !

    One thing above all else, that really is obvious; what disarray the whole financial services industry is in !

    Nothing works, every thing is either to expensive, to clunky, a impossibility to deliver and above all scary, no-one whats to stick their head out of their own front door most of the time for fear of being shot, paranoia is rife which in itself feeds the darkness in our souls.

    The blame for this, lays squarely at the regulators door past and present, the new pension freedoms should have been easy to slot into, and complement what we all do as an industry, advisers, providers and government staff alike, but no, it came when every-one is feeling vulnerable, from regulation overload and cost, and I have not even mentioned the staffing cuts, huge losses in profits, scams, fines, and compensations.

    Biblical ! (I think sums it up quite nicely)

  9. Some of the contributors here are charitable in the extreme with regard to the issue of what happens with their money. Maybe they would be happy to pay a higher rate of tax for Joe Public’s educational benefit as well.
    Personally, as I have said before, I didn’t come into this business to throw my money away on garbage like this. I am happy to educate people about their finances myself. That way I can also earn a living, as we all must (actually maybe not ALL but you get my drift). I AM NOT happy to give my money to someone else to do a half baked job of educating the public and am not happy to pay someone to sit at a desk doing nothing either.
    Give me my money back and let me use it to get some more admin help so I can get out there and educate more people.
    I think a few IFAs have been brainwashed into really believing they should be funding public education out of their own pockets, as well as paying their taxes.

  10. OK, first the levy: it’s 12% of the cost of the service, so stop getting on your high horses about what you’re paying for, because at most you can have a say over 12% of Pension Wise time.

    Next, you bang on about wanting to educate clients yourself, but what do you know about the impact of drawing a pension on someone’s entitlement to ESA? Broadening knowledge (which happens at the expense of CAB) fills a gap that no adviser is interested in or competent for.

    Lastly, there are two types of clients: those who can’t afford advice, and those who don’t trust advisers. There’s a pretty even split, so I do wonder how much business advisers are missing out on because of their PR problem.

  11. Sounds like the only thing Paul has passed….. is judgement !

  12. My trainee has passed R08 and he’s not authorised! I haven’t sat it yet, I might in the New Year.

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