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Why is simplification so complicated?

I was not surprised to read of Messrs Lawson and Ritchie’s handbags at 50 paces, with the ever conciliatory Iain Naismith as referee.

We started out with the aim of pension simplification, only to see all the vested interests make their case, resulting in the dog’s breakfast we now have. To really understand the transitional arrangements, you need to study them seriously, then discuss them with another specialist. Simply relying on one provider reduces your independence significantly.

Where does this leave us, when the FSA is warn- ing against not being proactive in the run up to A-Day? What happens when someone is proactive but not fully competent?

This must be an opportunity for specialists to support those who cover a wider brief.

Clients want to know if they are affected by A-Day and, if so, by how much. They do not need to have piles of unintelligible reports and charts. They need advice.

We also need to get into dialogue with the personal finance press to ensure that the esoteric nature of some of the new options is not overpromoted. The headlong rush to push property into pensions, either in Spain or in the UK, without any comment on the ramifications, will definitely lead to the proverbial tears before bedtime.

Can we contact all our clients or should we? Telling them what can be done post-A-Day could result in them applying for options which are not nor will be available to them. The FSA needs to understand the pros and cons of advising in an area where we have little knowledge, especially with offshore pension accounts.

It is such a pity that the Government did not have the courage to truly simplify pensions. But then, its own pension is not just unaffected, it is recently improved.

If we are to solve the pension gap, we need imagination. We cannot simply tell people they have to act but we must demonstrate to them the effect of hoping it will all go away, only to find that it has not.

Working until we are 70 is no joke and is just not workable, especially as the employee may be a danger to the rest of the workforce.

In a recent meeting with a journalist, he asked me what worried me most about pension simplification. I said it was those who chose to comment, as all they were doing was tipping off HM Revenue & Customs. How right I was. We were going to have family Sipps but we have seen them all but disappear, along with sev- eral other great ideas.

In closing, I must mention Treating Customers Fairly again. Some are yelling that the FSA does not have to do so, so why do we? We need to rise above this and adopt TCF as the foundation for our business. We need to engage more people in planning for their future.

As a final thought, perhaps we should clamour for Messrs Ritchie and Lawson to take to the boxing ring and settle the matter, with charity being the winner? Steve Bee and I can be the seconds.

Robert Reid is director of Syndaxi Financial Planning


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