Ask Thameside Financial Planning director Tom Kean for his views on pension freedoms and his response has the world-weariness of someone who has dealt with the fallout from the industry for years.
“On the face of it, it has been an exciting time and I sometimes think the aim was laudable. But then I remember how pensions are just another tool for politicians to use as they see fit,” he says.
In Kean’s view, the complexity around pensions is a double-edged sword. He says: “There is a lot of detail and therefore expertise to be able to pass on to clients who can see the value in that. But equally if there are too many changes people will eventually give up trying.
“Every time something gets changed, the pernicious effect this has on confidence cannot be overestimated. And with small tweaks all the way up to complete rule overhauls, the cost is felt at every level. As with anything in life, that is ultimately paid for by the consumer. So it’s not just confidence; it’s cost too. “
Kean attributes part of his cynicism to the pension misselling scandal of the 1990s. In 1994, the regulator ordered a review of personal pension sales between 29 April 1988 and 30 June 1994, amid concerns personal pensions had been missold. If people had bought personal pensions but were subsequently found to have been better off in employer’s schemes they were advised to leave – or not join – the advice firms involved had to review their sales and pay compensation.
Kean says this pension review was the biggest challenge of his career. “I was close to leaving the profession, if I’m honest. It was such a flawed process that still echoes around everything we all do to this day,” he says.
Having been through the review, he is worried constant tinkering with the pension rules and the way legislation favours one type of pension than another could lead to history repeating itself and advisers being put through the wringer again. Already he fears that reductions to the lifetime allowance and annual allowance mean advisers are practically having to second guess the pension rules and state of the economy in the future.
I was close to leaving the profession. The pension review was such a flawed process that echoes around everything we do to this day
Post-RDR, Kean believes the financial services industry is neither better or worse than it was before. He says: “On the whole I think it’s about the same. We still have crooks and plenty of advisers that charge too much for what they do. And we still have a system that is too opaque for most to understand, that enables those crooks to get away with ruinous rates of charges and, worse, out-and-out scams. With a regulator who is powerless to do much about it. Having said that, I actually have a lot of sympathy for the regulator. It is an impossible job, so the sooner we recognise that the sooner we can begin to do something about it.
“The obvious benefit of the old system is the fact the ordinary man in the street at least put something aside for their future. It may have been expensive, but I believe in doing something, no matter how modest,” he says.
It was the old system that Kean entered into after his childhood ambition to join the Royal Air Force did not pan out. “Both my father and grandfather were RAF pilots and I assumed I’d follow in their footsteps. But I failed the maths aptitude, so I had to resort to plan B and defaulted into financial services,” he says.
As a teenager Kean joined Equity & Law, a big employer in his home town. “As an 18-year-old I soon discovered that I was suited to more outgoing roles in sales and I was sent to the head office in the City.” He stayed a couple of years then, after spells at Scottish Amicable and Provident Mutual, Kean become an IFA.
He says: “In those days working with a provider was the traditional route to becoming an IFA. You got your wings and you would stay with a provider or go into the IFA world. I instinctively felt more aligned to being client facing, as I much prefer the idea of dealing with clients where I could make a real difference.”
Kean built up clients and contacts over a number of years before striking out on his own in 2013. He moved to Henley-on-Thames and began building Thameside into the company it is now. “It was a chance to do things in exactly the way I wanted to,” he says.
With its strong tradition in rowing, Henley gave the firm a niche in advising rowers. It is now expanding its advice proposition to other sports professionals through its Sports Elite service. Kean points out that lifetime cashflow planning is crucial for sports professionals, as their income can be volatile. It can show them the best and worst case scenarios if they gain or lose sponsorship deals, for example.
The focus on sports professionals has also created a stream of younger clients for Thameside. “Some of that will be pro bono work, which I’m happy to do as it helps build up new clients. And I want to give a little bit back to sport,” says Kean.
Kean’s love of rowing and open water swimming takes a back seat to his day job but he has stayed close to sport through a couple of business ventures. He is a shareholder in open water swimming brand Selkie Swim Co and also started Henley Swim, a not for profit events business, with a rowing friend 12 years ago.
He says: “Back then, open water swimming was viewed as a bit naughty and daring, not like the mainstream hobby it is today. We seemed to tap into a new vein of wanting to do something a little more liberating than merely laps in a pool.” Kean says he is involved in a very minor way now, but still feels proud that this business, like Thameside, has steadily grown.
What is the best bit of advice you’ve received in your career?
A crisis is an opportunity in disguise.
What keeps you awake at night?
Our new puppy – but once awake, how to keep all these plates spinning.
What has had the most significant impact on financial advice in the last year?
The continuing and confidence-eroding effect of pension changes.
If I was in charge of the FCA for a day I would…
Set up a simplification department to work on the premise that making all our lives easier will pay huge dividends in consumer confidence by leaving things alone.
Any advice for new advisers?
Keep asking yourself if you are developing skills that others will find hard to achieve; and be loyal.
2007-present: Director, Thameside Financial Planning
1993-2007: IFA, The Analysts
1992-1993: Sales consultant, Provident Mutual
1990-1991: Sales consultant, Scottish Amicable
1988-1990: Sales consultant, Equity & Law