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Under pressure: Is the pensions guidance service about to blow up?

The Government’s guidance guarantee could collapse under initial demand and create a “lottery” of inconsistent quality as key questions remain unanswered just 11 weeks from launch.

After the National Savings and Investments website crashed last week an hour after pensioner bonds paying up to 4 per interest became available, worryingly scant detail is available from the Government on preparations to cope with an initial spike in demand for the service when it launches in April.

Qualifications

Experts argue a wide disparity in the experience and knowledge required of those delivering the guidance by Citizens Advice and The Pensions Advisory Service risks creating a two-tier service where the face-to-face element is of poorer quality.

Citizens Advice has advertised for two roles to deliver the guidance: agents and case workers.

For agents it is offering a salary of £18-24,000 per year, and says applicants must have good numerical skills and customer service experience. The advert says: “Some knowledge of pensions issues would also be an advantage.”

Case workers will deal with more complex scenarios and must have a successful track record in either financial capability or customer service. Citizens Advice says Associate membership of the Pensions Management Institute or Chartered Insurance Institute qualifications would be “a strong advantage”.

TPAS’ advert for those delivering telephone guidance, however, says applicants must have experience of working in pensions and specific pensions knowledge, including law and practice. It says working towards an APMI or CII qualification would be an advantage.

TPAS chief executive Michelle Cracknell says the organisation is recruiting for the role on a similar basis to that for its advisers, who are required to have 10 years’ experience in pensions and a qualification. It will expect guidance applicants to have around five years’ industry experience.

JLT Employee Benefits director Margaret Snowdon, who last year worked with the Pensions Management Institute to develop a guidance qualification, says: “The people delivering the service are paramount to its success and they should have experience and skills in dealing with different types of pensions. They should have a minimum of about three years’ experience and some form of qualification.

“At this stage it appears the telephone service may be of higher quality than the face-to-face service, although it will depend on the quality of the applicants and the selection process.

“Citizens Advice is risking taking on people who are not good enough, or spending a lot of time filtering out people who aren’t good enough. The whole guidance service could fall into disrepute as a result.”

Training

Citizens Advice says a “high quality and rigorous” training programme being developed by the Treasury will ensure staff have adequate knowledge. It says its staff will receive the same training as those providing guidance at TPAS.

Citizens Advice head of service development Andrew Seager says: “Citizens Advice has extensive experience of helping people navigate complex issues and a strong understanding of how people make decisions.

“It is vital that staff delivering the pensions guidance have strong interview skills in order to understand people’s needs and respond appropriately, particularly when helping vulnerable people or those with complicated circumstances.

“A high quality and rigorous training programme will ensure all staff have the required pensions knowledge, whether they are delivering guidance face-to-face or over the phone. All staff delivering the guidance will have knowledge in accordance with the standards set by the FCA.”

A Treasury spokeswoman adds: ”All Citizens Advice and TPAS staff delivering the pensions guidance will receive intensive and detailed technical training prior to April 2015. They will be tested to ensure they have the necessary pensions knowledge before they talk to the public. They will also have access to a programme of continuous professional improvement.”

But Barnett Waddingham senior consultant and former TPAS chief executive Malcolm McLean says: “You can train people until you are blue in the face, but they need to have a starting point of knowledge. Citizens Advice seems to think that you can take people with absolutely no pensions knowledge and train them up in a few weeks’ time.

“Why is it asking for such a different level of pensions knowledge to TPAS? Arguably the face-to-face service is more difficult, because you are on your own in a room with someone.

“The quality of the service may improve over time, but those accessing it in the opening weeks will be guinea pigs.”

Standard Life head of pensions Jamie Jenkins says: “TPAS’ requirements are a good model and perhaps Citizens Advice feels unable to recruit people with that level of experience because it is not a pensions specialist. I would expect Citizens Advice to move to TPAS’ position in time.”

Guidance agents may also take the PMI’s new guidance qualification – the certificate in pension scheme member guidance – in due course.

The qualification is aimed at any individuals involved in helping DC and DB scheme members understand their options, including administrators and paraplanners.

The PMI says it provides both theoretical and practical knowledge on pension options, and includes an oral exam to test skill in dealing with enquiries.

A pilot of the qualification saw 23 individuals pass in December, including three TPAS employees.

PMI chief executive Vince Linnane says: “We have spoken to TPAS and Citizens Advice about using the qualification for their guidance staff and are waiting for their response. We are running a second pilot and are hoping more TPAS staff will take part.”

Managing demand

Others warn the service seems unprepared for a spike in demand in April, with the Treasury refusing to give numbers on the expected level of demand for the various aspects of the service.

Figures published by the Association of British Insurers last year estimated that under a “medium uptake” scenario, 200,000 people will use the guidance service per year. Its “high uptake” estimate predicts that 375,000 people will use the service each year.

The trade body estimated that 10 per cent of consumers will choose to access the guidance face-to-face, while between 60 and 90 per cent will choose the telephone service, with the remainder opting for the online service.

However, consumer research published by think-tank the International Longevity Centre-UK earlier this month found that face-to-face was the preferred method of receiving guidance. Its poll of 5,000 people aged 55-70 revealed 63 per cent of those with defined contribution pots would like guidance to be delivered face-to-face, and a further 20 per cent would prefer it online.

The online service is being built by the Treasury. The Government refused to give details on the development of the service when asked by Money Marketing, including staff numbers, expected demand, and measures to prevent the website crashing in the first weeks after launch.

A spokeswoman says: “The Government is working closely with stakeholders to understand and predict potential demand for the service, and to build sufficient and flexible capacity in the Pension Wise service to meet it.

“We are testing our website in line with industry best practice to make sure it stands up to very high levels of demand.”

Fidelity Worldwide Investment director Alan Higham says: “The most difficult aspect of all this to manage is the first spike in demand. You could potentially have 10 to 15 times as many people wanting to use the service in the first month.

“So instead of 40,000 people interested in the service each month, you could have half a million people wanting to use it in April.”

Higham says the Treasury is reluctant to publish figures on expected take-up out of fear of criticism.

He says: “I would imagine the Treasury has done some research on the likely demand and the important thing is to get the message out to people that it is geared up to deal with a certain amount of sessions from April.

“I think they are reluctant to give the newspapers a stick to beat them with, because if they say a set number they could get slammed for having poor take up.”

Cracknell refused to say how many staff TPAS is taking on, but insists the organisation will ensure it has “more than adequate” capacity when the service launches.

She says: “We are encouraging consumers to get in touch with us before April to help spread demand.”

Citizens Advice announced this week that it will offer guidance through 44 bureaux, with a “handful” more participating centres to be announced in due course.

It says each bureau will have between three and seven guidance staff, including at least one case worker. A spokeswoman says it is still determining how customers will be passed between agents and case workers. She declined to say how many staff are being taken on in total.

The Government’s champion for older workers Ros Altmann warns time is running out for the guidance service to be promoted effectively.

She says: “If Citizens Advice takes on people who are financially aware, then training them up is not an impossible task. But we don’t know what resources Citizens Advice has got, or what type of people they are taking on.

“We don’t know how many staff they will have doing face-to-face appointments, what hours they will be open and what they are going to offer in the session.

“That is a concern because I would like to see the service being properly promoted and trust being built up in the brand and we are not seeing that.” 

Citizens Advice and TPAS job specs

Citizens Advice pension guidance guarantee agent

Salary: £18-24,000 per year

Essential requirements: Good numerical skills, customer service experience, ability to communicate complex issues.

Advantageous requirements: Some knowledge of pensions issues

Citizens Advice pension guidance guarantee caseworker

Salary: £22-30,000 per year

Essential requirements: Successful track record in financial capability or customer service, strong numerical skills, ability to communicate complex issues.

Advantageous requirements: APMI or CII qualifications

TPAS assistant technical specialist

Salary: £30,000 per year

Essential requirements: Experience of working in or with pensions, knowledge of pensions law and practice, experience of dealing with the public.

Advantageous requirements: Working towards an APMI or CII qualification

Head to head – will pensions guidance be up to scratch by April?

cracknell

For: Michelle Cracknell, chief executive, TPAS

We are recruiting in the same vein as we currently do for staff. Most of the people who come to us need to have pensions experience and be in the industry already, and therefore will already have qualifications. We also require applicants to have a commitment to ongoing personal and professional development.

We have already been successful in our recruitment and are continuing to recruit.

The Treasury is working very hard to try and understand what the volumes are likely to be and dealing with the spike that might happen immediately after launch.

We are working on resource so we can make sure there is more than adequate supply at launch time.

Through our communications we are also trying to encourage people not to wait until April to contact us. From our experience on the helpline, those wanting to access the freedoms might not want to wait for the guidance, so they can speak to us now and be ready to access their money when the freedoms come in.

The other message we are trying to get out about guidance is it is a really good start but a lot of people may need regulated financial advice.

We signpost to regulated advice already, and we are waiting for instructions from the Treasury on where to signpost people from the guidance service, but it is likely to be the Money Advice Service’s at-retirement adviser directory.

mclean

Against: Malcolm McLean, senior consultant, Barnett Waddingham

One can feel reasonably happy about TPAS’s recruitment as they are offering a salary of £30,000 and asking for pensions experience and knowledge. But why is the level of pensions knowledge required and salary offered by Citizens Advice so different?

I also have concerns about Citizens Advice’s two-tier approach of having case workers to deal with more complex cases, as they seem to be assuming they will know which cases are more complex. I know from my experience that you only know how complicated a person’s affairs are once you have sat down with them.

We are 10 weeks away from the launch of the guidance and the providers need to step up a gear and in the case of Citizens Advice, think again. It is particularly worrying given the nature of the pension reforms, which will make the pensions market far more complicated than it was before.

Even with training, those delivering the guidance need a base level of knowledge to be able to explain the changes.

There is a risk of consumers coming away from Citizens Advice thinking they have got the answers when they have not.

The other big question mark is the numbers on supply and demand. The Treasury is still not able to say what level of demand they expect to receive.

We must remember that we are asking people to make life-changing decisions, and it is not looking good to have a service in place for April which can adequately support that.

gorvett

Adviser views

Martin Gorvett, director, Provisio Chartered Financial Planners

At the moment, it looks likely to be a bit of lottery, depending on which channel you use. Maybe they could hire retired advisers but the wages would have to be higher. You want guidance to come from your peers, rather than someone who hasn’t gone through it themselves.

stirling

John Stirling, director, Walden Capital

Consistency is important, but sadly the consistency will be that the people giving the guidance are unlikely to have wide knowledge of the historic mess pensions are in. They won’t have enough knowledge to know what they don’t know. Web capacity is going to a huge issue for the first few weeks. You cannot develop a website which scales indefinitely for an unproven number of visitors.

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Comments

There are 35 comments at the moment, we would love to hear your opinion too.

  1. What a surprise… NOT!

  2. I really object to having to pay a levy for this whole fiasco. There are level 4 advisers more than capable of giving pension guidance, who are ready now and really need no further training apart from updating themselves on the various options arising from this new legislation. Why I have to part fund a competitor service is beyond me and I only wish I had the means to legally challenge this decision. Free guidance as in ‘it’s not free guidance when someone else is paying for it’. The whole think is a crock.

  3. Inadequately trained, unqualified, inexperienced and unregulated people giving guidance on unfinalised complex legislation. Guidance which could have lifetime implications. Plus an untried web based system. Surely nothing can go wrong and I do not understand why everyone is being so negative? After all, highly qualified, experienced and regulated Financial Advisers surely could not do the job better and cheaper if say a voucher system were used. Of course there is a risk that, with the client’s agreement, we undertake further work and charge an extra fee. Oh wait a minute, are not these guidance people expected to recommend an Adviser in appropriate circumstances.
    I look forward to saying ‘Told you so’ very soon, perhaps even sooner than I anticipated.

  4. You would hope that the Treasury will instruct TPAS to direct clients to unbiased.co.uk or similar, not the MAS. The MAS’ corporate viewpoint is that advisers are not to be trusted and that consumers should just look it up on the Internet so they don’t get fleeced by the nasty private sector. The Treasury has already disdainfully treated the MAS like a gold-plated turd on the sole of its shoe by snubbing it for the guidance fiasco, even though we all assumed that something like this was the closest thing MAS had to a raison d’être. So if they have any – sense is asking too much, let’s say /consistency/ – they will do the same for its pathetic attempt to duplicate Unbiased.

  5. I suppose we shouldn’t prejudge how successful or otherwise this new initiative is going to be until it actually goes live, but the omens don’t look good and appear to confirm what many have suggested, namely that the service would and could almost certainly be better if delivered by regulated, experienced and qualified intermediaries, most of whom have a verifiable track record of knowing the subject area and provide guidance without charge as part and parcel of their first meeting with prospective clients.

    Is it really likely to be of any particular value to create an additional stage in a process which, ultimately, can only lead to us anyway? The crunch question in all these guidance sessions is likely to be So what do you think I should do? to which the only response can be Only a regulated, qualified and suitably experienced financial adviser can tell you that.

  6. Ultimately all costs are passed on to our clients, I am sure that they would be pleased to know how much extra they are being charged for every hairbrained scheme or investment that is doomed to fail, and every unsupervised fraudster that leaves a trail of compensation payments at their expense.

    I still cannot understand how these massive fines levied on banks cannot be used to fund these organisations that have little to do with us.

  7. I don’t know why they haven’t gone down a obvious route !!

    Employing IFA’s on a part time basis, (assuming no cross sell ?)

    Personally I only work 3 days a week, 30k for a caseworker for 5days ? I would consider doing 2 days a week for 18k a year given my qualifications and experience ?

    I bet they would save a small fortune on training and the hassle of advertising and interviews ?

  8. It is also worth noting that the positions are fixed term contracts to March 2016. Obviously no need for guidance thereafter.

  9. If there is one thing in life that you can be certain of, it is that where there is money there will be people trying to get some of it, either illegally or legally. What really worries me that many people will get poor guidance / advice (the distinction is definitely blurred in the consumer’s eyes) and / or lose what they have. The pressure in hindsight from disgruntled people will be such that politicians will be unable to resist charging us – the true qualified professionals – for restitution. It is a vote winner.
    Where is the guarantee that the Government will not come back to us for more money to pay for all this and the inevitable clamour for compensation? Us IFAs have less rights to justice than travellers…..

  10. The big question is what are these advisers being trained to say when someone asks “What should i do?” Are they being told to refer to unbiased, MAS or anyone at all? Are they being told just how important it is that they don’t tell people what they “should” do.

    Regulated advisers pay a very hefty price to be in the privileged position of being able to say “Mr Client, you should take this option.”

    As other commentators have mentioned guidance could have been provided much more readily by the already qualified, already experienced regulated advice sector.

  11. I honestly cannot understand why any IFA would be worried by this service. It’ll be very much the Council House version of advice, not the NHS teaching hospital, and we can expect it to drive referrals or to be shunned by anyone with any money.

  12. One wonders how many people who, having availed themselves of this guidance, will declare it to have been a waste of their time, in that the conclusion was to seek out a proper adviser and that there was nothing on offer that wasn’t going to be available other than by paying for it.

    Do we know just what people are going to be expecting from these guidance sessions? A free lunch perhaps (free to them, that is)?

  13. We are worried. It has been rushed. We are paying for it and when Government comes back for more resources (money) or when the complaints come in, we will fund it.

  14. I really object to having to pay a levy for this whole fiasco. There are level 4 advisers more than capable of giving pension guidance, who are ready now and really need no further training apart from updating themselves on the various options arising from this new legislation. Why I have to part fund a competitor service is beyond me and I only wish I had the means to legally challenge this decision. Free guidance as in ‘it’s not free guidance when someone else is paying for it’. The whole think is a crock.

  15. Man in Black

    My concerns about the scheme come under several headings:
    I am paying for it, from the levy and from taxation.
    I find it difficult to find what real benefit it will provide as it is ill thought out and the quality of the ‘guiders’ though no fault of their own will be doubtful.
    It is not regulated (at least I have seen no proposals for regulation)
    It could be delivered cheaper and better
    Most importantly I suspect a lot of people will still end up financially disadvantaged because they will not be able to do the comparative research to be able to make informed decisions. Of course, I would rather they came to me so that I can help them make informed decisions and charge them for my services. But even if they do not come to me my conscience would prefer them to get it right, rather than wrong.
    If/when it all goes belly up there is a danger that this will reflect badly on ‘proper’ advisers and the finance industry as a whole.
    If/when it all goes belly up, no doubt compensation arrangements will have to be put in place, and who do you think is going to pay for these?

    Personally I think the principle of guidance/advice on retirement is good but I just think it should have been better thought out and implemented better, rather than rushed through with ill thought out proposals, with inadequate training, inadequate funding (for the long term) over legislation which is not even finalised,

  16. There seems to be a lot of hysteria from “advisers” about what is an education service which it is generally agreed is necessary for those without an adviser. If an individual has a trusted adviser it would seem natural for them to address any questions/concerns to them. Similarily any adviser worth his/her fees should be explaining the changes to their clients rather than complaining about what guidance their non-clients are going to receive. In all probability advisers will gain new clients as individuals become aware of their options from April and the need to take bespoke advice. Whilst not currently an adviser I am Diploma qualified and have G60, K10 and K20, unlike I fear many of the contributors on here.

  17. Graham Hughes | 22 January 2015 2:54 pm

    Whilst not currently an adviser I am Diploma qualified and have G60, K10 and K20, unlike I fear many of the contributors on here.

    Are we supposed to be impressed?
    Are you in a situation where you are having to part-fund the employment of these so called guidance advisers? Would this guidance be like the so called guidance received by many bank customers looking for mortgage advice, who still probably don’t know they weren’t actually advised, it just felt like it having been steered to one of the banks own mortgage and dare I say it; life products. I have no problem with people receiving ‘free’ advice as long as I’m not paying for their privilege.

  18. Graham, looking through this thread it is not so much about threats or competition, it is the fact that it is partly paid for by us, and if it all goes pearshaped we are likely to pay again.

    It will open up some opportunities for qualified advisers to earn fees, the problem is that this may be offset by the size of any levy. My personal view is that how it works is not my problem, if I have to pay to clear up the mess afterwards it is.

  19. JInker, I am about to be employed by the CAB, so think my qualifications are relevant; I was letting the contributors know that maybe the posturing about lack of qualifications obtained by the individuals taking up these roles was ill-founded.

    Also the levy (which I believe works out at approximately £140 per adviser) is hardly going to break the bank, I am sure this will be recouped many fold when the clients come to regulated advisers for bespoke advice.

    The financial services industry has persistently shot itself in the foot particularly regarding “advice” given regarding pensions (active member DB to PP transfers, opt-outs, eye-wateringly high charges, in-house annuities rather then OMO, the list goes on). The role of educating the public has been given to two independent bodies who have no vested interest in “advising” any particular course of action by the client. Maybe this same public has become disenfranchised enough from the adviser community not to approach them as a first option. As mentioned above, with guidance from these bodies, individuals will seek advice to enact a suitable course of action. Instead of constantly looking on the black side of this arrangement, maybe advisers should look upon this as an opportunity to gain more clients who have the funds to pay their fees and realise the value of advice.

  20. Graham Hughes | 22 January 2015 11:59 pm

    Jinker, I am about to be employed by the CAB, so think my qualifications are relevant; I was letting the contributors know that maybe the posturing about lack of qualifications obtained by the individuals taking up these roles was ill-founded.

    I see you’re poacher turned gamekeeper and do actually have a vested interest. Maybe you’re one of those failed advisers who had to either get out or look for something else but of course now you’re no longer doing it you become a back seat expert? Incidentally, my own qualifications trump yours many fold and I don’t need a job with the CAB unlike yourself. You don’t need to be impressed. I would rather not pay £140,00 of my earnings to part-fund your future employment thank you.

  21. Jinker – veiled insults are so predictable and as usual come from a place of ignorance. I have not been an adviser for many years and have held senior roles within the occupational pensions sector since. I am happily in the situation where I do not need to earn a significant salary so can take on the role with CAB with a genuine desire to educate clients at no cost to them before they see an adviser. I think my knowledge is superior to most “independents”(perhaps you are A/FPMI or a Chartered Financial Planner and hiding behind anonymity) but if £140,00 (sic) is significant to you perhaps your are not as successful as you purport to be?

    Many commentators here think the advisory sector could take on this service which has to be free to the user. So are you prepared to give up an hour of billable time per client (many of whom may not have a requirement for further advice)? I imagine £140 per hour is a reasonable charge rate so seeing one such client per year would cost you the same as someone (like me) effectively filtering clients for you. As stated previously why not look upon the Pensions Guidance Guarantee as a source of pre-qualified clients?

  22. If you throw stones don’t live in a greenhouse.
    ‘and as usual come from a place of ignorance’
    ‘I think my knowledge is superior to most “independents”(perhaps you are A/FPMI or a Chartered financial Planner and hiding behind anonymity)’

    That is what you usually do on a forum. Right?

    You of course will be thanking the likes of me (an IFA) and others for the contribution to your salary instead of looking down on us from your lofty perch.

  23. I think there are four possible outcomes for the guidance service:-

    1. It’ll be completely overloaded, almost from the word go, and there’ll be many complaints.

    2. There’ll be a dismal lack of demand, with lots of people sitting around doing nothing very much and worrying about how soon they’ll be getting their P45.

    3. A lot of people will have unrealistic expectations of what it can provide and be deeply dissatisfied at having been provided with a great deal of confusing information but no guidance as to their best way forward other than to seek out an authorised intermediary (so why am I talking to you?) Or

    4. The powers that be will have judged everything just right ~ demand, expectations, how the guidance is delivered and all the rest of it.

    On which one would you bet?

  24. And here’s another thought. Phone rings.

    “Ah, hello, I understand you provide advice on pension funds.”

    “Yes we do.”

    “Good. I’ve just been to my local Citizens’ Advice Bureau for a guidance session and they said my next step should be to get in touch with someone like you.”

    “Okay.”

    The man there said that most adviser firms don’t charge anything for their first meeting with new clients. Is that right?”

    “Usually, but that doesn’t apply for people referred our way as a result of their guidance session with the CAB.”

    “Oh, why’s that?”

    “Because I have to pay a levy every year towards the cost of the free guidance service. So, for people referred to us, our normal free initial consultation doesn’t apply.”

    “That’s not very helpful.”

    “I’ll be as helpful as you like, but you’ll have to pay.”

    Click, brrrrrr.

  25. Julian Stevens | 4 February 2015 12:30 pm

    That actually happened yesterday.

    lady on the phone wanting a free first consultation about her pension post April. I asked would she come to my office. No, could I go to her? She lives 30 miles away and wanted me to see her on a Saturday. At this point I had to explain there would be no advice given at the first discussion as it was just to establish if we could help her and agree what she wanted going forward. If she then became a client that was when we started giving advice. Oh, you’ll be wanting paid then won’t you? Yes, was my response. She somewhat cooled at this point and said; she’s get back to me. lol, as if?

    They created a monster and I can see many such phone calls in 2015. The outcome will be the same. I’m not being paid a salary on the back of industry levies. I said it earlier; this is a crock.

  26. Julian

    So you get a qualified lead and turn it down because you are “paying a levy” to fund the guidance service. How is this different from paying for advertising. If someone phoned you a result of for example a yellow pages ad or a hit on your paid for website would your response be the same, “I have paid for advertising so I must charge for the initial consultation”?

    Smacks rather of cutting off your nose etc. I don’t believe for one moment you would say this to an actual client, maybe rather a way of joining the bandwagon of “clever” posts disparaging the guidance service before even one client has used it.

  27. “So you get a qualified lead and turn it down because you are “paying a levy” to fund the guidance service. How is this different from paying for advertising”

    Graham – thanks for taking the time to post here and it’s good to get an insight from someone directly involved with the guidance.

    I think the main difference with paying for advertising (and the main bone of contention) is that the proposed leads from the guidance are neither voluntary, targeted, quality controlled or assured. Most adviser firms would appreciate the discretion of how they chose to allocate their marketing budget, rather than having it mandated to them with an unproven promise of leads down the line.

    While the current funding requirements do not appear to be onerous, given the intention to expand and develop the guidance service, I think advisers are fully entitled to be concerned (and somewhat miffed) about the possibility of having to write blank cheques to fund the growth of the guidance.

    In order to appear on the MAS directory, firms have to commit to dealing with enquiries for smaller fund sizes. As this is not part of the business model for some firms, they will derive no direct benefit at all.

    I am open-minded about the value of the guidance service. I am however also frustrated about the rushed nature of the service, lack of cost-benefit analysis, and the growing impression that the powers that be see advisers as part of the problem rather than the solution.

  28. @jinker
    My response would be that the first 30-60 mins may not be charged but if the potential client wants to use that time up with me sat in a car driving to their home at a time which may not be particularly convenient to me then the fee clock will start ticking as soon as it should! If however they believe that the matter to be discussed is important enough then they should take the trouble to maximise the time available during the working day and by travelling to my office. Alternatively they could always pop along to Citizen’s Advice!

  29. Mick

    Thanks for the non-hysterical response.

    My point was/is that if a client is advised to see a regulated adviser it will be in all probability because they have a defined need identified by the guidance service. Surely this should be seen as a very cost-effective means of obtaining new clients and once seen the client’s full circumstances will be known, opening up other avenues for (chargeable) advice and /or referrals. I would hope that any adviser worth his/her salt would not advise on a client’s pension(s) in isolation so each client will be an opportunity. As I said earlier let us not damn the service out of hand, rather wait and see before pronouncing judgement.

  30. Jabba

    Sensible way to approach I would say, you always have the right NOT to see a client.

  31. In many ways this is turning out to be an unwelcome distraction to our normal business, or an opportunity whichever way you look at it.

    From a personal viewpoint my time is limited, and I have to decide how best to use it. So just as with any new client referral, if it does not fit in with my service proposition or meet the criteria to be accepted as a client then I would say no thank you. That is not to say I am a mercenary, people who know me will say that I always try to help others for no reward. As others have said, why should we pick up the pieces, as well as helping to pay for the service. Hopefully Julian’s outcome 4 comes to pass.

    The worst that can happen is that I get a reputation for not giving away my experience and qualifications for free, I can live with that.

  32. Few people with decent sized pension funds have got there without the services of an adviser, whilst the average pension fund size is not much more than £30,000 anyway (which means that many are even smaller). Am I really interested in such leads from the CAB or PAS, “qualified” or otherwise? No I am not. In addition to an assortment of existing clients with small pension pots (for various reasons), I already receive from other sources enquiries from people with small pension funds, whose main interest, thus far, seems to have been in how to cash them in.

    Like the example cited by Jinker above, I recently received an enquiry one afternoon from some woman wanting me to visit her at home that same day to advise her on her pension fund/s. She said she had debt problems. I declined to drop everything and visit her that afternoon but arranged an appointment for a few days later. When I arrived at her stated address, I just couldn’t find her house for love nor money so I tried phoning her but there was no answer either on her home or mobile numbers. I left a message and she called back a few days later to apologise but, in the end, it came to nothing and I never even got to meet her. Perhaps, for new clients, I should stipulate a minimum size fund of £100,000 and if anyone says “So you’re not interested in people with small pension funds” my reply will be along the lines of “Damned right I’m not, I can’t afford them”.

  33. Graham Hughes ~ The PG levy IS different from my outlay on a Yellow Pages ad or a web site, for the simple reason that the latter are MY choice. I choose whether or not I want or need them. I choose how much (if anything) I spend on them. I choose their content and the types of client they’re pitched to attract. I choose the terms on which I may or may not take on enquirers as clients.

    In contrast, the PGS and the levies I’m forced to pay towards it have been forced on me by people who’ve chosen steadfastly to ignore all suggestions that:-

    1. the best people to provide guidance are authorised and regulated intermediaries (towards whom most users of the PGS are likely to be directed anyway, so why create an extra stage in the process?),

    2. a system of redeemable vouchers would be better (though even if such a system were to be set up, the delays with getting them redeemed would probably be so bad that most intermediaries would decide not to accept them),

    3. the problems of small pension pots are not the fault of the intermediary community (rather, in many cases, they’re the consequence of 25 years of prejudicial government meddling) so why should we be saddled with sorting them out?

    4. Allowing unfettered and unlimited access to pension funds was ill-considered and is likely to encourage a lot of people to focus on and perhaps rush towards 100% cashing in, instead of (if it’s not already too late) building on what they have and working towards a sustainable strategy for long term income. Reviewing and advising on old contracts is very often a time-consuming and costly process. Many of them may well not facilitate adviser charging or (because of the FCA’s blanket commission ban) be able to accept additional or even resumed contributions (I have a couple of just such cases on the go at the moment).

    My business is not a charitable enterprise and receives no funding from any outside body.

  34. Graham Hughes, I think the principle of guidance for all about to take their pension pots is a good one, but ultimately advice is only useful if when taken it leads to a better outcome. I very much hope that the Guidance Guarantee service proves to be very successful and that it will help people using the service to gain an understanding of their options. I also hope that people using the service will have a positive experience and will feel that they are better equipped to make a decision for themselves than before they were “guided”. However, I would tend to agree with several of the contributors on here who have pointed out that the vast majority of people seeking guidance will be those with small pots. For these people who come to see me after guidance, it is hard to see how the fees I would need to charge (to break even and maybe make a small profit) would lead to an outcome where I have delivered value for money. Therefore in most instances qualified regulated advisers would not be in a position to profitably advise such referrals unless they charge a level of fees that greatly outweighed the benefits received from clients receiving my advice. My father worked for the Citizens Advice Bureau for 7 years and I know what an excellent job they do. So I support the service. However, I prefer to support them as a taxpayer not as a financial adviser. The service provided by CAB and TPAS is a public education service, which to me makes it a public service which needs funding by the taxpayer not by the financial services advice industry. I wish you well in your new role.

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