The intention of this article is not merely to point out the obvious – we all know there is a pension crisis. Even the politicians are at last taking this seriously. But pensions are still a theoretical point-scoring debate instead of a subject where there is a real consensus for positive change.There is much expectation that the Pension Commission report will move the debate forwards. However, there are worries that Adair Turner supports the controversial Swedish model for compulsion. This would not be good for our industry, given the focus on price rather than quality. Over the past few weeks, Australian senator Nick Sherry has been doing the rounds, promoting the compulsion experience of his home country. This has been received very positively by many but, unfortunately, we may already be set on a different road. For all this political noise, there is no clear route that will improve the pension provision of the population at large. So I ask you to bear with me as I consider ways in which our industry could grasp this thorny issue and truly begin to make a difference. One initiative which looks hopeful is the Scottish Widows report, What Women Want, published on October 19. I have always been opposed to marketing aimed at women. It invariably ends up being condescending. Did you see the FSA publication, Piling on the Pounds, issued in January? I still cringe. But there is no doubt that, when it comes to pensions, women are significantly disadvantaged. This is not the place to retrace the history and consequences. But, for anyone want- ing to know more, I recommend the Widows report. Although women are hardest hit by lack of pension provision, the situation applies to many men as well. The question is, how can our industry make a dent in the problem while the political debate continues to rage? We need to focus on the world after A-Day, taking a fresh view which is not focused on stand-alone products – products which have a terrible reputation based on the mismatching of expectation and returns, inflexibility, poor tax incentives for those that struggle to save anyway, poor access, lack of advice and so on. A single product sale will never be the answer. After all, for the majority of consumers, pension is a dirty word. We need to develop clear communications featuring motivational messages which interest and stimulate consumers. Without this, people will not take action. Access to appropriate advice is essential. This is not the place to enter into an IFA vs whole of market vs multi-tie argument. What is essential is that advisers are well qualified, able to recommend from a decent product range and have the client’s best interests at heart. Where trust exists between an adviser and client, there is real value in the relationship. This tends to be more important for women than for men. Many of us are disappointed that A-Day will miss the mark in respect of closing the pension gap. So far, the main impact has been to create excitement for the wealthy. But when we look at the big picture, it does have advantages for everybody in terms of flexibility and wider choice. It also enables us to knit tax-efficient wrappers, such as Isas and pensions, in ways we have never before. We should also rethink the incentives for saving. Why cannot rewards be based on the length of time that money remains invested, rather than locked to a tax band? What people need are simple savings within tax-efficient shelters, including funds which can be reallocated for different needs to cope with life changes and offer sophisticated options as the client demands them. Our state pension needs to change to be fairer to women but it should also underpin private funding, not be seen as an either/or situation. Two regimes – the public and private sectors – should be working in tandem to provide for those who cannot and reward those who have. I look to the future of long-term saving with renewed enthusiasm. With joined-up thinking and clear vision, we should be able to show the Government that we can provide planning solutions which make a real difference.
Former Britannic Asset Management chief Francis Ghiloni is returning to the industry as Prudential intermediary sales director. Ghiloni, who left Brit- annic AM last year after 22 years with the group, replaces Chris Traynor who has moved to Payment Shield. He will head a team of 165 sales advisers backed by a support team of […]
Former Abbey chief executive Luqman Arnold is moving to Corsair Capital as a partner. The private equity firm invests in financial institutions such as banks, insurers, and speciality lenders. He will be joining senior executives Nicholas Paumgarten, Ignacio Jayanti and Kimball Booker. Arnold left Abbey following its takeover last year by Santander.
How can investors harness the winds that have been blowing savagely across the US markets this year?
Aberdeen Asset Management is looking to make an impact in the defined-contribution pension market after acquiring a life company as part of its Deutsche deal. The firm is rebranding Deutsche Asset Management Life and Pensions Company into Aberdeen Life. Aberdeen head of sales and marketing Gary Marshall will become chief executive of the life company. […]
Join Jelf at Employee Benefits Live 2015 for a personal demo of how benefits technology can help you.
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
The curious goings-on in the world of financial services
Experts have played down any immediate moves from the FCA towards those firms that are not prepared for Mifid II regulation that comes into force on 3 January 2018. However, concerns remain that a “material number” of small asset managers have not yet started preparing for the major European regulation. The FCA expects firms to […]
OMGI chief executive and star fund manager Richard Buxton is set to lead a management buyout of the single-strategy funds division of Old Mutual Wealth with the backing of TA Associates. The £550m deal is set to be announced before Christmas, Sky News reports. The buyout is part of Old Mutual’s managed separation, which is […]