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The name game

Although now described as yesterday’s mistake, the announcement by Tomorrow that it will not allow a move to self-invested personal pensions could force a renaming in order to reflect its stance on this option, which was used to enable the sale of the original product. So how about Tomorrow Never Comes?

It’s clear that the firms taking over closed funds never even gave a second thought to treating customers fairly.

The FSA do not share their reduced communications approach.

In my own firm we were once able to request various projections but when the provider is owned by a closed fund company this is almost impossible. From the planner’s point of view it makes servicing these plans more expensive than their “current cousins”. As I once said in a speech at a pensions’ conference: “The more difficult it is to obtain the permutations in projections and/or asset allocation/performance, the easier it is to justify moving those assets to an alternative vehicle.”

It’s all very well for the regulator to make sweeping generalisations about using self-invested personal pensions v using stakeholder, but in most cases the move to Sipps enables the client to have the much-needed single view of projections and of asset allocation/performance.

What creates the issue for the regulator with Sipps is the lack of transparency in charges and that is where the concern really lies, coupled with the worry that Sipps are the financial equivalent of designer handbags. When I studied economics many years ago such items were referred to as “articles of ostentation”.

The latest term I spotted was “investments of passion”, that is, something you did not need, but still went out and purchased because of what it said about you. But I digress. The ability to obtain information easily has got steadily worse and we now escalate routine enquiries to formal complaints far too often.

The regulator needs to start keeping statistics on the response times for information enquiries. After all, disclosure does not cease at plan issue. This league table should be published and open to challenge by the IFA community.

It should be possible to obtain all information in under 30 days. I may exclude difficult calculations but asset allocation/performance should not take months to produce.

To advise clients on an ongoing basis, we need continual support from the insurers. It’s great to provide electronic valuations but if it cannot support detailed audit trails, then I have to question its real impact on moving the review process forward.

I would contend that effective review processes are the way to build a business of value but we need providers on the same page and that includes the Zombie companies.

They must not be allowed to operate a skeleton service and, if that fouls up their business model, then too bad. Treating customers fairly is not just for inception. It’s for the life of the contract and valid requests must be honoured.

When providers consider if a change of name is necessary, can I ask them not to bother? Let’s have a change in attitude instead. If we can raise the use of a professional financial planner to an “investment of passion”, then we will truly have arrived.

We have to generate that excitement, which means ensuring that our most effective human advertising boards – our satisfied clients – carry the message of the effect of financial planning far and wide. Let’s start the campaign as soon as possible.


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Key themes for 2017

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