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The wide reach of the RDR

The Retail Distribution Review is far reaching as we all know but I did not expect it to be so far reaching as to infringe on my journey into work the other day.

A man talking on his mobile was sitting in front of me and was attempting to sum up the RDR in a few minutes which he achieved fairly well – though at one stage I had to restrain myself from interrupting him and correcting him on a key point.

Anyhow, the man ended by saying he thought the company he worked for should submit a response to the paper and that ³it would be a good PR opportunity² to release this to the press.

And it seems many in the industry are perhaps waking up to the PR opportunities the RDR presents.

Last week I attended a roundtable held by Pointon York Sipp Solutions to discuss what the RDR means for long-term contracts in the pensions sector.

There was much confusion over what the FSA was trying to achieve and whether it was on the side of the banks, life offices or advisers.

After the discussion, we were no closer to the truth but a couple of issues emerged which highlighted some of the problems around the RDR proposals.

It was generally accepted that the RDR proposals would squeeze out general financial advisers which would leave generic advice, primary advice and professional financial planners in the market.

Under current proposals, primary advisers will be advising on simple products and Reynolds Porter Chamberlain pensions solicitor Jonathan Davies says he cannot see that pensions will be included in this category.

Therefore, generic advice and PFPs will be left as the only options for customers seeking advice on pensions and, in particular, workplace pension schemes.

As many PFPs pitch themselves at the higher end of this marketplace, the question arose as to who would be left to service middle-market occupational schemes.

Syndaxi Financial Planning managing director Robert Reid thinks there will be nobody left to deliver advice to pensions customers and that this is the biggest threat to the NPSS, while Jonathan Davies said generic advice is a ³disaster waiting to happen².

I¹d be interested to hear any alternatives views on this.

In other news, pension consultant Ros Altmann says pension scheme trustees do not have enough experience of investing and have not received the right advice on where to invest.

Altmann wants trustees to receive more training and spend more time focusing on appropriately diversifying pension schemes.

Altmann says that trustees have become too complacent because they have been told that funds will ride out choppy stockmarkets in the long term.

Richard Jacobs Pension & Trustees Services director Richard Jacobs says that in the majority of schemes, especially small company schemes, trustees are burying their heads in the sand.

Altmann also tells me that the Pensions Action Group is organising a ³Stripped of our Pensions² demonstration for the fifth year running at the Labour Party conference in Bournemouth on September 25.

Pensioners who lost money following the collapse of their company pension schemes will demonstrate naked outside the conference. Let us hope the weather improves for their sakes.

And finally, B&CE deputy chief executive John Jory says the Government should have done more to help existing employer-sponsored schemes that are working, rather than just introducing Personal Accounts.

Jory says he believes group personal pensions and stakeholder schemes have a far bigger role to play in the pension market while personal accounts will simply act as a safety net for people not already in an employer scheme.


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