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The generation gap

I have just been in Monte Carlo debating many issues surrounding retirement planning. There is always a debate about how to get people saving for retirement but the real business involves “at retirement” options or inheritance tax, effectively a discussion of how people lucky enough to already have a big pot of money will plan for the years anywhere from 50 to over 70.

They will probably be the lucky ones. Somehow along the way, they picked up the equity saving habit. What has gone wrong now and can advisers do something about it?

I have heard a range of advice and views in recent years. For example, there is Ned Cazalet, who, having said many depressing things particularly about selling pensions and bonds, suggested “here is the good news – the demographics are on your side.”

And they are. But Cazalet does not just seem to be saying, follow the money, he is also saying, follow clients up the age scale. Advisers are told to segment their client bases and to lose some clients too – those who are not worth the while advising.

In many ways this can be good advice and I have seen IFAs big and small adopt this advice and increase efficiency.

But my question is this, if investing in assets that appreciate over the long term is in everyone’s long-term interests what on earth are we going to do to convince the public to do so?

Perhaps a generation got scared off by dotcoms and TMT. Discount brokers also seem to be in the next generation of development. On the basis of Isa guides, quite a few people got into equities and that is surely exactly where they should be.

I admit that some may have guided people the wrong way and there were all manner of suggestions and accusations that fund managers’ “marketing support” may have an undue influence and guided people in the wrong direction too, with the performance sometimes listed being neither a guide to the genuine past performance, let alone the prospects for the future.

Here is the challenge/question? Can advisers help the 30-40-something lot get into equities?

Is there an adviser model that can help? Perhaps Hargreaves Lansdown or Best or Chelsea provide the answer but some of their fire is surely concentrated on other areas.

What about a sort of Lifesearch for funds with phone assistance where off the page does not manage to convince. Or are lots of IFAs still prepared to do the donkey work? John Joseph springs to mind, where they rarely turn down the chance to advise a client, regardless of income group.

I also wonder at the regulations. I have sympathy for those who ask why on earth it is so difficult to sell a fund when it is so easy to get people into debt.

Clearly, some of the emphasis is wrong. The answer certainly is not in company share schemes – ask the staff of Northern Rock.

I have been around a longish time in covering these issues. I understand that some advisers may scent the ways in which banks might try and steal a march or where some player or other might try to bring the return of the direct salesforce.

I understand that many sins have been committed which regulation has tried to stamp out but isn’t a big proportion of the population currently in danger of committing a grave sin of omission by not saving their hard-earned money in the sort of assets that will work hard for them? Do any advisers have the answers?

John Lappin is editor of Money Marketing

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