View more on these topics

Vahey warns on subsidies for personal accounts

Aegon has hit out at Government claims that personal accounts may need extra state subsidies to ensure the scheme is not competitively disadvantaged by serving lower-earners.

Speaking at a House of Lords’ debate on the Pension Bill last week, Lord McKenzie of Luton said personal accounts will have a public service obligation to accept workers who the current market finds commercially unviable.

He said that this could put personal accounts at a disadvantage and cited European state aid rules which say there are some cases where it is right to compensate a body for performing a public service obligation.

Aegon head of pensions development Rachel Vahey says auto-enrolment means the issue of lower-earners will apply to any qualifying scheme and not just personal accounts. She says: “It is not necessarily true that only personal accounts will be at a disadvantage for serving lower-earners. Other schemes will be too and they will not get a subsidy. There is a misconception that private pensions only serve high-net-worth customers but they serve a whole range of people. The Government are allowing themselves a little bit more wriggle room by saying this. It is a subtle change of terminology but it is significant.”


Soft focus

We hear much these days about compliance responsibilities, the need for constant documentation, record-keeping, transparency and so on, but we should not forget that the core of adviser/client interaction is about building a relationship. This is what training experts often refer to as soft skills and relationship selling – the building of trust, the understanding of client needs and using that information to advise and recommend the best solution. The client buys, rather than being sold, an appropriate product.

More needs to be done on OMO

The ABI has published guidance aimed at improving provider marketing material to consumers approaching retirement but advisers and campaigners have questioned whether this is enough.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm