The fundamental flaw with RDR and Auto-Enrolment

Today I am in Hampshire in a posh hotel holed up with a bunch of hungover salesmen who for no obvious reason have hung around long enough to have become Sales Directors of the insurers and advisory firms they work for.

It has been a revelation to discover something that I had not previously appreciated. These pensions that I had thought were being set up to alleviate hardship in old age are here for quite a different reason.

They provide opportunities for charging that are  essential if bar bills are to be met and conferences like this one are to continue to be hosted in hotels like this.

They are here to ensure revenue targets are met.

We have discussed subjects of national importance.

Particularly we have debated the vexed issue of paying advisers out of the pathetic contributions  poor people get paid into their pensions. We have debated what happens when the cost of the advice exceeds the contribution paid. We have concluded that where the pot is insuffecient to pay for the advice, remedial action needs to be taken.

We think it entirely understandable for advisers to be concerned in such circumstances. The miserable pauper without a penny in his pension has been given advice on how to manage his money without the money in his pension pot or indeed his bank balance to meet the adviser’s bill.

We think there is a strong argument in such circumstances for re-opening the debtors prison in the Fleet and consigning auto-enrolees to hemp picking for a day or two. That would teach them the value of thrift.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to The fundamental flaw with RDR and Auto-Enrolment

  1. Mike Atkin says:

    Hmmm – Deportation was always a useful tool. But I am glad you have seen the light. Its an industry and a product that is not unfit for purpose for some but that is entirely inappropriate for others but with a reward structure that suits the industry very well. I’ve said it before and I’ll say it until I’m blue in the face – who in their right mind would dump the responsibility for investment performance on to those least able to manage it. As ever – the truth is stranger than fiction.
    Large G and T please – and put it on Old Cedrics tab – he can turn his heating off for the night.:-(

  2. Andy Heath says:

    Henry – a spectacularly spleenful contribution to welcome the end of the week! Maybe ‘splenetic’ would be a better term – it’s more obsolete. Such an old-fashioned attitude to the salesman, that noble educator of the great unwashed, encouraging them all to save for a retirement they will otherwise have to suffer in poverty, and then helping them make the best of what interfering governments – and bankers – have left them in their puny pots when it comes to the drought that follows the drying up of generous pay-packets from philanthropic employers.

    That’s quickly slagged off a few of the other easy targets – so I shan’t trouble myself to bother with being rude to actuaries. But I’m really pleased to hear that the European Government has ruled you obsolete, since I’ve only got to survive until December to ensure that I’ll live as long as my wife. That was hardly rude, but it added Brussels to the list!

    All you salesmen out there have a great and profitable day. Who’s more likely to look out for the customer’s best interest? A hungover salesman or a miserable actuary?

  3. Pingback: RDR and AE – what future for commissions and advisor-charging? | The Vision of the Pension Plowman

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