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Rs are to reason why

IFAs should not get trapped in the negative doom and gloom spiral about declining pension revenue as a result of the introduction of stakeholder.

On the contrary, the welter of changes in pension legislation offer advisers a myriad of hooks to get in front of businesses and write lucrative pension contracts and explore other opportunities for financial products in the corporate market.

All they need to do is remember the three Rs. Getting in front of a business is a question of stimulating interest in what you have to offer and many summarise this process as delivering the right message to the right audience at the right time.

Delivering the right message to the right audience requires targeting and one of the simplest methods of segmenting business audiences is to deliver tailored messages to small, medium and big businesses.

Depending on the size of your own practice and the resources you have available for your own campaign, you may be more comfortable targeting a specific business segment.

Many argue that a good hook to secure pension contracts with smaller business owners/directors is a review of the here and now issue of drawing more money from their business rather than a dreary pension planning proposition.

IFAs can put forward a whole host of solutions that give busy business owners/ directors more cash in their pocket, ranging from paying dividends instead of salaries to the prospect of setting up a new business to mitigate tax.

Schemes for business owners to retain more of their cash are underpinned by different types of pensions and the common motivation of all business owners/directors to be able to take more cash out or their company is an excellent route into the corporate pension market.

Building on these pension-based tax mitigation opportunities are the other benefits of executive-type pension plans such as using a pension contribution to help buy a commercial property rather than rent.

Medium-sized businesses with five employees or more may or may not be aware that they will have no option but to provide private pension arrangements.

IFAs can really add value to these businesses, notifying employers of their new pension obligations to their workforce and detailing the choices they face.

The IFA can offer membership of a good group personal pension scheme and, subject to exempting conditions, allow the employer to ignore stakeholder and all the inherent issues of offering a new product in a tight timescale.

Not only can GPPs encourage collective pension provision, as they are outside the stakeholder environment, they can provide a valuable income stream for the IFA.

Such group schemes allow even employers with only a handful of staff to offer workers a valuable boost to their salaries through a company pension scheme.

The benefits offered may also include group life insurance, income replacement insurance for the long-term sick and private medical insurance and economies of scale mean these benefits cost the company only a fraction of the true value to the employee.

At the same time, if relevant, the IFA can discuss executive pension plans with directors.

For bigger companies with an occupational pension scheme, the option of partial concurrency which allows members earning less than £30,000 to hold an individual pension at the same time could offer a more attractive top-up option than in-house AVCs.

This is because stakeholder has low admin charges and a quarter tax-free cashback option, whereas cashback is not available on pre-1987 AVCs and has never been available for FSAVCs.

Also, this audience can provide a receptive market for other aspects of financial planning.

Just as the number of angles IFAs could take to get an audience with corporate clients are legion, so are the ways of making contact and the choices are widening.

There are the traditional marketing methods of mail-shots, phone canvassing, seminars, advertising and PR. My own network has a library of pre-prepared material for members&#39 use.

Consider new media. For example, the use of email is a particularly appropriate method of approach to high-tech companies. The Direct Marketing Association (www. can help you source lists.

Another way of reaching businesses is through professional introducers such as solicitors and accountants. Again, methods of contact are wide, as are appropriate messages, but these people are increasingly receptive to ideas for new income streams as more competition for their traditional services such as will- writing, book-keeping and conveyancing has led to a decline in bread and butter business.

Financial services/investment business touches on most aspects of legal and accountancy-based advice.

The opportunities are there for IFAs to discuss the implications of changes in the pension market with corporate clients or prospects.

In doing so, you can ensure that not only are your clients complying with the new legislation but that you seize the new business opportunities that arise.

The results might surprise you. Although there is a lot of noise about stakeholder arousing curiosity, there are plenty of opportunities to discuss other products on the back of this latest pension shake-up.


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