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Mike Morrison: How to get the pensions feel good factor

So, a new start for me as this is my first article written in a new role but, unfortunately, the song remains the same.

Sad as it may seem (and some people might suggest that I should get out more), I have found it difficult over the last couple of months with so much going on but with little ability to comment.

Having a bit of time has meant a little bit more interest in the Olympics than I thought, but as I write the games have come and gone and we are still basking in the warm afterglow of sporting success and national pride and talking about the legacy.

It did make me wonder whether we could use some of this good feeling that has been generated with the Games and the preceding Jubilee in our quest to improve savings and the trust in our industry

Who would have bought a Diamond Jubilee pension? And who could resist the strapline “Saving for retirement could mean you can afford to go and see another Olympic games”?

But seriously, over the last few weeks we have seen further preparation for the RDR with new charging structures announced, systems to facilitate adviser charging but yet further research on how people are not saving.

We are now seeing stories seeking to defer the FSA ban on cash rebates and suggesting that SIPP providers are finding it difficult to meet the fast approaching deadlines for the disclosure of charges.

In difficult investment markets it appears that more people are making their own investment decisions and the story seems to be that there are more of the “if it looks too good to be true, then it is” category.

As an industry our focus is still on the supply side of the equation when perhaps we should be concentrating on the demand side.

We must focus how we encourage people to save more by concentrating on charges, service and solutions to real problems.

Platforms are the glue that will hold all this together and allow advisers to offer a real joined up service. The interaction of tax efficient savings wrappers and a consistent and suitable approach to risk and investment allocation could add real value for clients at a time when showing the value of advice is key.

Auto enrolment is almost with us and this could well give a bit of a nudge to a lot of people but it will not be a solution on its own and we must work with it to succeed.

A big issue for me though is retirement income. Gilt rates (and therefore annuity rates) continue to fall and there is a real squeeze on how much an individual can withdraw from their pension and I do think a review of retirement options as a whole would be beneficial to the industry.

So hopefully a new slant on some old issues and over the coming months I will look at some of these issues in more detail.

If we get it right in the near future then our legacy could be a valuable one.

Mike Morrison is head of platform marketing at AJ Bell

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. David Trenner - Intelligent Pensions 23rd August 2012 at 12:56 pm

    “Who would have bought a Diamond Jubilee pension?” I bet a number of Barclays customers wish that they hadn’t bought anything from Mr Diamond!!

    Good Luck in the new role! David

  2. A pleasant article that boils down to just four words: The Annuity (rates) Trap.

    Unless or until the government (meaningfully) addresses that (amongst other things as well), public antipathy towards locking away money in a pension plan will not change.

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