Insight.Out managing director on why she is committed to pension transfer advice, despite the high-profile problems
The British Steel saga exposed the ugly side of pension transfers, providing a stark illustration as to why people considering one need the right advice. However, the fallout has led many advisers to question whether they can afford to operate in the market due to rising professional indemnity insurance costs and reputational risk.
Not for Insight.Out Financial managing director Jayne Gibson, though. Gibson knows the defined benefit transfer market through and through. She has even written a book about it – the study guide for the Chartered Insurance Institute’s AF7 pension transfers exam.
After building up years of experience in the pension transfer space, she does not plan on turning her back on it any time soon.
“My whole business is about holistic financial planning and finding out about clients to see what solution fits their problem. It is important that people get proper advice and that advisers are not scared or worried about advising against a transfer and the reasons why,” she says.
“Even if you tell people not to transfer, it gives them peace of mind that it is the right thing to do. If someone has racked up debt and has no financial discipline, they would be the worst person in the world to transfer, as no matter what they tell you at the time, they would not be able to stick to it. They are better off having a fixed income than flexibility.”
Pension transfers may be unsuitable for the majority of clients but it is in their interest to at least consider them. Gibson says advisers must fully understand a client’s personal situation and be clear on reasons for the advice they are giving on whether to transfer or not – just as they would with other areas of financial planning.
“The same principles apply to pension transfers as to protection, for example – you go through the process to find out what is actually needed,” she says. “I will carry on giving pension transfer advice because it can make a massive difference to people’s lives.
2015-present: Managing director, Insight.Out Financial
2012-2015: Partner, North Financial Management
2006-2012: Chartered financial planner, Gibson Wealth Management
1998-2006: Financial services manager, Doherty Pension & Investment Consultancy
1994-1998: IFA, Neilsen-Fforde (Life & Pensions)
“One guy I met had been through the mill. Another adviser he had seen said he should not transfer and he was beside himself by the time he came to me. He had separated from his wife, his son was being bullied and he was going for joint custody.
“He needed a house for him and his son to live in but he did not earn much and had a low borrowing capacity. He wanted to transfer to use the tax-free cash to put a deposit down on a house. From a lifestyle point of view, a transfer was the right thing for him to do.”
Completing the transfer meant the client could reduce his overdraft and buy the house he wanted.
“A month later, I got a letter from him telling me how he had moved into his new house. His son was settled and they had even got a little dog. This is why I do it, because of the changes I can make to people’s lives.”
Care and compassion are not qualities the public tend to associate with advisers. The lack of consumer trust that comes from negative perceptions bothers Gibson and she is exploring how to build confidence in financial services for her PhD in Financial Planning at Manchester Metropolitan University.
“There are parallels with the police service in that the police suffer from similar bad press and need to build confidence very quickly. If they don’t, they are not going to help the community and solve crime. There is a similar thing in our industry, especially when we are looking to bring in new clients. We need to work on our reputation.
“Professional bodies like the Personal Finance Society are doing a lot to help but advisers need to be more involved. We should be supporting each other rather than knocking each other down and thinking of everyone as competition. There are lots of clients to go around, so we do not need to do that.”
Gibson, a former nurse, joined financial services after finding it difficult to get a nursing job that did not involve shift work, which was incompatible with bringing up two children alone.
“I fell into a job doing admin in a small office. Within two years I was doing my financial services exams and working as an adviser in the firm,” she says.
By 1998, she had qualified as a pension transfer specialist and moved to Doherty Pension & Investment Consultancy, a bigger firm with a bigger pension book.
During her eight years there, she became financial services manager with the responsibility for supervising other advisers in addition to her pension transfer work.
A spell as a self-employed adviser followed, then Gibson embarked on a partnership at North Financial Management, a firm she had been working for on that basis.
Formalising the arrangement as a partnership was a natural progression but Gibson eventually realised she had different ideas to her business partner, so the only way forward was to go it alone.
“It was scary. I had sleepless nights when I took on my first employee,” she says. “I was now responsible for this person and needed to make enough money to support them. They were relying on me.
“One of the things I wanted to do when setting up the business was to encourage women into the workplace and promote flexible working. When I was an employee, it was made clear to me that my first responsibility was to my job, not my family.
“But now I have my own business I am keen on not putting barriers in people’s way.
“It makes for a happier place, where we work and support each other as a team.”
What is the best bit of advice you’ve received in your career?
You trap more bees with honey than vinegar, which means you get better results from being nice to people.
What keeps you awake at night?
Not much. I try not to worry. What’s the worst that can happen? As long as it isn’t something apocalyptic, you just deal with it.
What has had the most significant impact on financial advice in the last year?
All the focus on DB transfers has had a big impact.
If I was in charge of the FCA for a day I would…
Get advisers, PI insurers, product providers and consumer representatives like Age UK around a big table to debate, so they could see everyone else’s viewpoint.
Any advice for new advisers?
Give your time to learning – not just technical skills but the soft skills too.