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TPAS chief urges Govt to rethink ‘face-to-face’ pensions guidance plans

The Pensions Advisory Service chief executive Michelle Cracknell has urged the Government to rethink plans to offer “face-to-face” guidance to savers when they reach retirement.

Chancellor George Osborne yesterday stunned advisers and insurers by announcing a radical overhaul of the pensions tax system.

The changes mean that from April 2015 anyone aged 55 or over will be able to take their entire pension pot as cash.

The Chancellor also guaranteed that people approaching retirement will receive “free and impartial face-to-face guidance”, funded by a levy on providers and trust-based pension schemes. The Treasury will also provide £20m to “get the initiative up and running”.

Cracknell says: “The most important announcement from the Budget was the referral to guidance. The Government cannot open up the gates and not produce any form of guidance for people to access.

“It is absolutely possible to deliver guidance because TPAS are delivering it already. At the moment we deal with 80,000 customers a year and we have 20 people on the helpline, so you can easily see how that can be scaled up.

“But all the research we have done suggests this shouldn’t be done face-to-face because most people do not want that. It is not convenient, it can be quite intimidating and people tend to be a bit embarrassed about what questions to ask.

“We think the delivery channel preferred by the public would be things like webchat and Skype. That makes it really doable and those are things TPAS does already.”

Advisers have warned making insurers responsible for providing retirement guidance could lead to bias.

Cracknell says: “I don’t think providers are the right people to deliver this, either from the skill set and experience they have or the public perception about what is happening and who is giving them the information.

“TPAS can be a delivery mechanism to make this happen. If we had to get in a car and see people one on one it would not be workable but I don’t think that is what most people want.”



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There are 23 comments at the moment, we would love to hear your opinion too.

  1. That’s right! Nearly everybody I meet tells me how they would much prefer to deal via Skype and Webchat. Can you not buy a pension on E-Bay yet?

    I don’t know just how I didn’t see it?

    Who are these idiots?

    Lets get things straight.

    Most people don’t think they need advice. They don’t know whats out there and what options there are and inertia is the order of the day.

    Most people do not want to pay for anything that they think they can get for free from t’internet or from their mate at the golf club/pub/work/gym etc etc.

    Todays compensation culture and general laziness will mean that it is someones elses job to make sure that they are given the most suitable product and if they don’t, a claim firm will get them some compo for it. Why bother to put any effort in yourself?

    People who work for Regulators/Quango’s/Public Bodies will continue to feather their own nests on over inflated salaries and gold plated pension schemes whilst pontificating sh!te from their Ivory Towers.

    These are the undeniable truths my friends!

  2. And who will pick up the bill when this ‘guidance’ is classed as ‘advice’ after a widow/er is left destitute by the decision made by their spouse at retirement?

  3. I would beg to differ with Michelle Cracknel! Over the 30 years I have been an independent adviser I have found all bar none wanted me to meet them to give pension advice. This was both setting up plans to reviewing existing plans and what the best was to do at retirement. Such visits invariably involved other aspects of the clients’ financial situation and brought out many areas they hadn’t considered! By giving advice or even guidance over the telephone or online risks sending clients down the wrong route. I fear TPAS is no better the MAS in this respect. Both only give ‘fleeting’ advice in my opinion and borders on what one got down the pup on a Saturday night!

  4. goodness gracious 20th March 2014 at 11:22 am

    So this is Michelle’s first press release to try to get loads of extra funding and attempting to increase the PAS to a huge bureaucratic organ to provide free, impartial face to face advice.
    The people you deal with get information, personalised advice is limited. People who seek your information service do it because they don’t have to pay you, and overall you are doing a good job in giving relevant information to individuals.
    But this new initiative cannot be delivered via a website, Skype notwithstanding. Only by looking into the whites of retirees eyes can you give relevant advice. If someone wants to empty their pension pot in one go, can you ask them ‘Why’? Run through the implications, let them think about it, what will they live on, how will their lifestyle alter? Face to face only.
    The only method of providing independent advice (not necessarily implementation) face to face is to give retirees a voucher to redeem at a recognised IFA, who then cashes in the voucher once the recipient has been given advice on paper specific to his needs. Otherwise this process is meaningless.
    So sorry Michelle, no huge increase of staff, therefore huge pay rise for you, but nice try!

  5. If face to face advice is unnecessary for such a complex thing as choices to take at retirement, why is such advice regulated?
    Having said that, if the TPA don’t provide regulated advice, how can they be allowed to go anywhere near this?
    Typical Rent Seeker, seeking more money for their domain.
    Enough said!

  6. Nice try Michelle; but no cigar this time !

  7. Richard Morrall 20th March 2014 at 12:16 pm

    goodness gracious that’s funny as our company operates on a non face to face basis giving full Independent Financial Advice on all aspects of at retirement. We pass on the increase in our factory gate price from provider to the consumer meaning in a lot of cases we can offer the client more income than an IFA but ultimately we are 100% confident our clients are placed with the right product for them at retirement. Many IFA’s don’t specialise in this area of financial planning and when we have been in competition with some IFAs many haven’t even heard of the products we can offer. Therefore I completely disagree with your comment and this is backed up by the 260 5 star reviews we have from people who have used our service. Feel free to read them here:

  8. goodness gracious 20th March 2014 at 1:08 pm

    Richard, if I haven’t heard of the product you promote and you are not an IFA, then maybe I should investigate you further. If you are not regulated, do not provide face to face advice then I am suspicious! You have the whiff of someone selling unregulated products, no matter how many satisfied clients you have, so prove me wrong!

  9. Stephen McCallum 20th March 2014 at 1:51 pm

    Keen to hear more about what you do / sell Richard. Excuse my cynicism but your ability to offer “other products” that many IFAs “have never heard of” sets my alarm bells ringing.

    I must, however, commend your company on your trust pilot results. Almost every single reviewer leaving a 5 star review, very impressive. Whats more, it appears that everyone who is leaving a review is doing so for the very first time. Your service and advice is so good that people are flocking to Trust Pilot for the very first time just to leave you a review. They don’t seem to have time to set up a proper profile or add an pic like most other reviewers. What a tech savvy bunch you have for clients.

  10. @Stephen. My Pension based in that hotbed of Finance………Doncaster.

    Careful though because “We are a company of Diploma Qualified IFA’s and offer advice, giving you in effect a guarantee with your annuity purchase”

    “We can get better rates than many IFA’s due to the level of business we write with the major providers”

    I don’t forget they have had 260, 5 star reviews. that’s right a full 260!!!!

    Richard only looks about 12 year old so i’m guessing he’s never had a hard paper round. Either that or the living was easy as a recruitment consultant.

    My pension expert? In the words of the famous philosopher Jim Royle – “My ar$e!” Dot Com.

  11. Government should provide vouchers for IFAs to redeem.

  12. I see that bosses of insurance companies and some well known web sites are worried.

    Of course people need face to face advice this is something that will effect the rest of their lives!

    Great budget and good news for savers giving them the power and not the vested interest of the industry!!!!

    Just need to back it up with in forcing the rules of who can give ADVICE e.g. SPS certificate only advisers.

  13. Apart from wanting to protect her own position Michelle is right. The people to whom she refers are just too thick. Most IFAs couldn’t be bothered with them anyway. Most have pots of less than £40k anyway.

    As the old saying goes ‘No one ever got poor underestimating the intelligence of the British public’

    Michelle is just confirming it.

  14. This release is at best naïve. At worst is demonstrates an complete lack of understanding of the people this will affect and the important decision they have to make. Very worrying!!

  15. Richard Morrall 24th March 2014 at 2:03 pm

    Goodness gracious and Stephen, we are regulated and directly authorised by the FCA. Fully Diploma Qualified and specialise only in options at retirement. We write around £12 million each month in ‘At Retirement’ products and the feedback I gave you regarding other products, I mean when we offer for example a fixed term annuity to a client who has an IFA (this is just one example) the client’s response was “my IFA hasn’t heard of those”.

    When it comes to offering advice at retirement it doesn’t need to be face to face. If it did, we wouldn’t exist and wouldn’t be growing as a business and as for your comments Stephen on the reviews you obviously don’t understand how trust pilot works. It isn’t like some review sites that allow you to register false reviews, clients require an order number which is generated from our CRM and is sent with an invitation once a client has completed business, this needs to be unique, as does their email to ensure fake reviews can’t be registered. Not all are 5 star reviews as nobody always leaves 5 stars, we do have a few 4 star reviews also. Setting up a proper profile and a picture, why would anybody want to do that it’s not a dating website?

  16. Richard Morrall says – ….we are regulated and authorised …..

    yet no sign of Richard Morrall on the Financial Services Register ??

  17. Stephen McCallum 25th March 2014 at 9:21 am

    @ Richard – That certainly wasn’t what you said first time round. So your clients know what their IFA has or has not heard of? And, omniscient as they are, they shun their IFA for you?

    I happen to be very familiar with TrustPilot, enough to know that it is not a dating website but thanks for pointing out. If you take a sample of other websites, UK or other, you will find copious reviewers have uploaded an avi / pic and have also posted multiple reviews. This is the essence of the website – it becomes a “review community” (not unlike amazon) whereby one person can review multiple services, goods and websites. My understanding is this then lends credibility to the reviews and creates a “network effect”.

    I just found it a little curious that all of your reviewers appeared to be first time reviewers, no profiles or pics and gave such glowing reports. They tend to read similarly too. All 264 of them. Such homogeneity, and from anonymous clients, is quite rare that is all.

  18. Richard Morrall 25th March 2014 at 3:55 pm

    Antonio everybody that works for an IFA practice has to be on the IFA register? Really? Maybe I need to be sacked then. WE as a company are directly authorised and regulated.

    Stephen I’m not sure if this is an attempt to gloat on your knowledge of review sites, I’m confident unless you have a business you don’t subscribe to their service and don’t understand how their TRUST rating works but they have invested millions in ensuring that the practice of fake reviews your are cleverly eluding to doesn’t happen.

    It would be impossible to undertake what you are suggesting. Our clients currently only deal with us once as they are purchasing an annuity in most cases, therefore why would they need to make multiple reviews?

    In most instances it is the first time a client has heard of Trust Pilot therefore will be the first time they have used the site so multiple reviews may occur in the future, should the FCA ever require any of the reviews to be validated we certainly can.

    It’s taken 2 years to build up that trust and homogeneous as the product is pretty similar, something quite rare gives the public even more confidence in our service. Finally your comment on the client knowing what the IFA knows or doesn’t know, why would the IFA not suggest a product that was more suitable for the client if they had knowledge of that product?

    This happens on a regular basis, I’m confident you don’t know every element there is to know of every financial services product available on the market? Especially when you have time to read all of the 264 reviews on our site? We have many examples of your comment above in one instance we even won the business from an IFA representing a company as the fee he was charging was ‘too greedy’ in the client’s mind and his knowledge was limited in this arena.

    Advice doesn’t have to be face to face but is needed now more than ever.

  19. goodness gracious 26th March 2014 at 12:19 pm

    Richard, your advice model may work for you and as restricted advisers, limiting yourselves to the ‘at retirement’ market, providing written advice regarding all sorts of annuity purchase, impaired, temporary, lifetime, investment linked, can provide a good halfway house. I am sure you do a fine job and blow the socks off those lazy comparison websites, thus your clients give good reviews as you provide a more comprehensive service than they do. Congratulation on providing a better service than is normally available over the internet.
    But how can you really understand clients positions? Can you really look someone in the eye and question their risk attitude? Do you always get the whole picture or just that which the client thinks you ought to know. Who tells you the full story of their debts? This is the problem of a remote internet based proposition that is a bulk processor. Skype can help I am sure, but don’t get fooled into thinking your firm is as good as a competent IFA with long experience and knowledge of their clients. By mainly selling annuities you are on a sell and forget model, whilst, if you recommend drawdown, how do you adequately service their plan?
    I am afraid that your business model has taken a severe pounding in this budget, especially from 2015 when all bets are off and annuity sales will plummet. Drawdown, face to face advice, will be a major part of my work from then, providing the FCA get to understand the difference between client choice and risk of emptying a pot prior to death. Pensions are no longer a retirement income product, more of a tax free savings scheme with some taxes on exit as a result of the budget. Bit like an endowment!
    So if you and Michelle think that a non face to face initial assessment will work, think again. The requirements look to be for face to face, with written information, personalised to the clients circumstances, but generic, rather than product specific. Could you provide this service? Alternatively you may be able to provide an internet based sales proposition. once the generic advice has been given. If the initial advice is given by someone like the CAB, be prepared for chaos, if it is done by IFAs under a voucher scheme, then we could pull in a lot more business from retirees without advisers of record.. But it must be face to face and done by level 4 qualified and higher, persons with a rigorous and recorded process according to the government website.

  20. I agree with GG thanks for saving me from writing the same!

  21. Richard Morrall 27th March 2014 at 2:56 pm

    It’s amazing we continue to write business. You are entitled to your opinion, many of the points being proved wrong however and if you really think every retiree will be able to get a better service face to face than we provide you are hugely mistaken. Access to IFA’s via a voucher scheme is ridiculous. The proof will be in the pudding, keep watching the reviews grow, in fact we are at over 280 now although I’m sure even if I invited you in to our offices to show you the suitability report for these clients you would still not fully believe they exist. We’ll continue doing what we do and best of luck to your voucher scheme, I wish you all the best.

  22. goodness gracious 27th March 2014 at 3:32 pm

    Richard, the government has stated that by law, every retiree will have access to face to face advice, but on a generic basis from the treasury document.
    The numbers of first class reviews are a little irrelevant if retirees are told by this forthcoming system, be it provided by the CAB, the PAS, another as yet unannounced Quango or NGA, or via a voucher system to IFAs, that they have to have face to face advice. You do not provide this service, so all your satisfied clients will, in the future, have to see someone else prior to your involvement. Bad luck, the chancellor has not been kind to you,
    Retirees who have been given generic F2F advice to purchase an annuity, especially the less well known types that you specialise in, should be able to deal with your firm. I cannot see why your business should not carry on, however the drop in CP annuity sales is forecast to be about 60-80%, so how does this effect your business? Will you need to modify your offering, we will see!
    You must remember that the word Pension to the bulk of the population is synonymous with ‘rip off’ with broken promises, disappointing returns and loads of people living off proceeds. Those who mistrust pensions, however poorly informed, will take the tax free lump sum ASAP and take the rest out and pay the tax. Then they will probably keep it in a bank and pay tax on it. and there are loads of them out there. iI is our job to educate these people that their pension can be the best thing since sliced bread, be a major part of their retirement planning, but a holistic approach, not just pension advice,

  23. Richard Morrall 28th March 2014 at 10:12 am

    As I said, proof in the pudding, see if we are here giving advice non face to face in a years time. With the team we have behind us, I can promise you we will be but in the mean time, keep watching those reviews grow. All the best.

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