Time and again I find myself huffing and puffing at the latest media dig at financial services. Recently, I had the contrasting pleasure and pain of listening to the normally affable Ros Altmann on an early morning slot on Radio 5 Live.
I’m sure most of us would agree that Ros is usually spot-on with her views and opinions when she speaks as an ‘expert witness’.
And she was true to form on this particular morning as she spoke about the recent furore over pension scheme charges for auto-enrolment.
Now I reckon I personally give good value for money on all my schemes. I have been looking after some for over 20 years and I have never had any grumbles. They are to the last, good quality, fully-blown GPPs with all the functionality anyone could wish for. And yet, here we are, potentially being forced to cap charges on great schemes that everyone is happy with.
Even Ros at the end of her piece succumbed to the subconscious discrimination towards corporate advisers, effectively tarring us all with the same brush by using the word “fleeced” when “charged” would have been perfectly appropriate and accurate. I’ll be kind and put it down to the ungodly hour.
Instead of randomly firing-off cheap shots at certain quarters of the advice community, the FCA and media need to calm down and get their story straight. If they are going to have a pop at pension scheme charges and try to cap them, for auto-enrolment or otherwise, they must logically have a look at all other retail products at the same time and exert what is effectively an unwanted intrusion into market forces for them as well?
In other words, why pick on this particular sector? The logic goes, of course, that it is because it is compulsory. Well there are clearly degrees of compulsory depending on what you are looking at. State benefits are utterly compulsory (more so than an easily opt-out-able auto enrolled pension) and yet we have no idea about the value for money we all get from that benefit (which will be precious little I dare wonder).
There is a world of difference between a “B-list” provider’s cheap-as-chips vanilla flavoured stakeholder style offering and a well-respected, fully-formed GPP with external fund links. So why try and dumb-down the whole sector?
By all means encourage and educate consumers; but do not deny millions of people the chance to participate in something that is frankly much better.
Nest must be shaking in its ivory tower at the prospect of a charge cap – the last time I looked it did not come near the proposed cap in certain situations. But if it does ever come to it, and I truly hope it does not, I have this feeling there will be some kind of ‘special case’ applied to Nest in particular. What a complete farce that would be. What other industry would allow this to happen?
Yet again we find ourselves shouting at politicians to leave us alone and let market forces work their magic.
By all means let people buy a ‘Ford Fiesta of a pension’ if they really want to, but don’t deny the rest of us the option of a BMW 5-Series 3.5 Turbo Diesel.
Tom Kean is director of Thameside Wealth Management