Had a good or bad experience with pensions advice or guidance?

Former_MSE_Will

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Be_Happy

PensionWise

I volunteer with CAB (admin. only) and we have a PensionWise adviser based with us. I see the problems he has with the unrealistic impressions that clients have on what he can do for them.

He is strictly banned from giving individual ADVICE, the important word is GUIDANCE. He can explain all the options available but cannot discus individual pensions.

Clients come expecting him to sort out their pensions and often leave disappointed.

dunstonh

It would probably have been cheaper to give all retirees a £250 coupon which they could take to an IFA and let the IFA give the advice/guidance. The £250 could be reclaimed by the IFA from the pot built up from the levy. If its just guidance (non-advice) then the IFA would charge no more. If the person needed advice rather than guidance then the IFA could offset the £250 against the advice bill.

You avoid the need for unqualified third parties being trained to a relatively low standard to provide guidance and you allow IFAs to actually earn back some of the money they pay towards pensionwise/MAS etc.

princeofpounds

This practice has now almost entirely died out, because the FOS declared that regardless of what the client had signed, such business was not execution-only on the grounds that sending a client a brochure constitutes advice, and therefore the whole advice process including fact-finding and a suitability letter must be followed.

Sorry to return to a comment from much earlier in the thread... but if this has become such an issue for IFAs, how on earth do people like Hargreaves Landsdown get away with issuing 'research' on funds which is often little better than marketing material, and yet disavow and advisory responsibility?


The majority of pensioners with modest pots, for whom IFA advice is too expensive, are now pretty much at the mercy of this kind of marketing.

SnowMan

I have mainly volunteered but also worked at my local CAB for 8 years, although this post is purely my personal view.

My experience is that people coming to guidance sessions have been genuinely thrilled (and that is no exaggeration) by the help they are getting through the Pension Wise guidance sessions at the CAB, and that is reflected in the exit surveys that clients fill in after sessions.

It is a myth that the CAB guiders doing this have limited experience (probably based on the minimum requirement when the CAB jobs were advertised). Amongst the 5 guides at the delivery centre I have knowledge of, there are 87 years of high level pensions experience, we are talking pension actuaries and financial advisers here, and that is before we add in financial services experience in other areas than pensions.

Many people attending sessions say they are going on to seek financial advice, and they find the sessions really useful in skilling themselves up before they do.

Others are happy with doing things themselves and they get a lot out of the sessions in checking their own ideas and getting new ideas, and are happy to take things forward.

There can be a bit of difficulty say with people who have less than 50K in their pension pots. They get a lot out of the sessions in helping them at long last understand their pensions, but where they are not confident in practically taking things forward (for example they have decided they want to access their pensions flexibly but have difficulty comparing different drawdown products and charges), but they can't afford financial advice, then there is a bit of a gap at the end of the process. That doesn't mean the person hasn't got a lot out of the session, but it does mean there are certain gaps. The review looking at access to advice and guidance hopefully will look at these gaps.

The strength of the CAB doing this is that they are a trusted organisation.

onesixfive

atush wrote: »

Why have you not been saving into a pension since you left?

If you had a DC pension you could live on that til age 60, and take your pension unreduced.

People with DB pensions who want to retire before scheme age, should run DC pensions alongside for this purpose.

I had to take a new job at approx. half of the salary when I left the council, & the new employer offered no pensions scheme.
My husbands former employer had just involved the Pension Protection Fund to bail out HIS pension - so I was hardly going to pour more funds into a DC pension for me at that time when all we could see was our monies going down the drain.

dunstonh

My husbands former employer had just involved the Pension Protection Fund to bail out HIS pension - so I was hardly going to pour more funds into a DC pension for me at that time when all we could see was our monies going down the drain.

Why?

DC pensions are not subject to the Pension protection fund (PPF). So, what happened to the DB fund should have no impact on your decision making for the DC pension. Plus, even if it ended up with the PPF, he probably will still end up with more than had he gone with a DC plan to begin with.

Malthusian

Sorry to return to a comment from much earlier in the thread... but if this has become such an issue for IFAs, how on earth do people like Hargreaves Landsdown get away with issuing 'research' on funds which is often little better than marketing material, and yet disavow and advisory responsibility?

The difference is that Hargreaves Lansdown send this stuff to tens of thousands of people. I was thinking of IFAs sending a brochure to one or two of their more experienced clients to let them make their own minds up.

Hargreaves Lansdown's business model involves sending their brochures and "research" to tens of thousands of people, some of whom will bite. The traditional IFA will have only a few hundred clients and advise them on a one-to-one basis. When an IFA sends a client a recommendation he'd expect over 90% to follow it. When HL send out a research note they expect only 1% of their customers to respond to it, but they send it to so many that the 1% is still profitable.

The regulator has apparently taken the view that customers of HL being sent mass mailings can understand that they aren't getting advice but clients of an IFA can't, even if they sign a letter saying "I understand I was not given advice".

HL has a lot of the Uber business model in it: i.e. "1. It is easier to seek forgiveness than to ask permission. 2. If you grow quickly enough, by the time the regulators cotton on to what you're doing, they'll be forced to give it." (I have an HL account, for what it's worth.)

onesixfive

dunstonh wrote: »

Why?

DC pensions are not subject to the Pension protection fund (PPF). So, what happened to the DB fund should have no impact on your decision making for the DC pension. Plus, even if it ended up with the PPF, he probably will still end up with more than had he gone with a DC plan to begin with.

This was my initial gripe of being passed from pillar to post - I am fairly literate - and know who to go to for most advice, but pensions leaves me cold.
How many people are aware that DC pensions are not subject to the PPF ?
There are so many TYPES of pensions, DB, DC etc etc - then within each organisation (such as the council) there are several rules for their own pensions which change frequently!


However I have only recently become aware (as my 63 year old husband becomes closer to retirement & this brought about our original enquiry), that his PPF bailouts will get NO LUMP SUM & Members who have not yet retired will only receive up to 90 per cent compensation on reaching retirement age. But these 90 per cent compensation levels are also subject to a cap which is recalculated every year for new pensioners this cap. The paperwork he gets each year is VERY minimal.

princeofpounds

The regulator has apparently taken the view that customers of HL being sent mass mailings can understand that they aren't getting advice but clients of an IFA can't, even if they sign a letter saying "I understand I was not given advice".

Thanks for the reply. The above section of your post is exactly the nub of the issue - anecdotally many consumers do perceive it exactly as advice.


HL is a pretty good investment platform in my opinion, for what it's worth. I just can't stand the marketing masquerading as 'research', which in turn gives the impression of advice.