Pension agnostic?

Door

An “agnostic” is someone who knows he cannot know and so gives up trying to find out.

You hear the phrase “pension agnostic” bandied around at the moment, mainly from the providers of ancillary services that help companies auto-enrol.

If you key the term into google you get to the sites of the HR flex providers. It is their proud boast that the software that they provide works with any pension. When I just looked , Staffcare were #1 on the search

I can understand a firm such as Staffcare, distancing itself from the long-term outcomes of auto-enrolment- the pensions people buy. Staffcare provides compliance software to businesses that keep them on the straight and narrow.

But when one of Staffcare’s vendors sets out his stall by tweeting

You’re not saving for a pension; you’re saving for yourself. Forget about products (they don’t exist anyway); think about yourself.

…I get confused – I thought I was saving into a pension plan?

I had to turn to an article in the advisory trade press to get more detail.

But for Steve Bee, the founder of JargonFreePensions.co.uk, what matters most in the post-RDR world is not products but service. The RDR signalled, quite simply, the “end of product” he said.

“What we called products in the past, in the future are likely to be as relevant in people’s everyday lives as floppy discs are to people who use iPads – things have changed.”

This I find very strange indeed.

There’s a touch of the Vicki Pollard about this; to paraphrase…

frustrated IFAs, unable to derive an income from products reinvent themselves as service providers, and snarl “bovvered?”.

Maybe I’m being harsh, but this obsession among Corporate IFAs with platforms , flex and AE middleware seems a nonsensical over-reaction to the end of commission . And it’s taking them down a blind ally.

IFAs are great with people, their unique ability is converting complex financial concepts like ” a pension” into a tangible product – “happiness in old age”. The “product” of retirement savings is “a lifetime income – protection against living too long”.

Corporate IFAs who forget this heritage and turn themselves into software salespeople sell themselves short.

We can know what makes for a good “pension”; it’s not hard – contributions, investment and managed decumulation (to sound actuarial). What is hard is to insist that “good and only good” happens. 

Knowing “what good looks like” is the opposite of agnosticism. 

To get people saving proper amounts into proper workplace pensions with proper drawdown is what financial advisers are uniquely placed to do.

“Pension agnostic” a phrase suggests not just that we cannot know what good is but don’t care. Faced with NEST and NOW and auto-enrolment and the loss of commission, financial advisers give up on pensions and throw their toys out of the pram? They go and sell HR software?

Surely not?

To be fair to Steve Bee, he has campaigned for thirty years to get IFAs to better understand pensions – and by extension to get pensions advice to the people who need it most.

But like Brian, his followers may follow him up the mount, listen to his sermon and come away convinced that

“blessed are the cheesemakers”.

IFAs cannot all ( as St James Place claim to have done) turn their back on the mainstream to focus exclusively on the “high net worth”.

Nor should they be exclusively focussed on technology solutions

Rather than run away from the product, they should embrace mainstream pensions – they are by far and away most people’s most important source of savings.

IFAs auto enrolment needs you!

Your skills are needed by the million small and micro employers needing help with staging and by the 11m people employed but not saving and by everyday folk saving into rubbish pension plans.

You IFAs need  to get your mojo back and rediscover what made you successful. You cannot be pension agnostic, you must become “product” focussed again. But this time the focus must be on the end product of their advice- the pension, rather than the commission it pays.

To this aim, firms like mine, who advise employers, must create the opportunities for you to deliver in the workplace. We must start opening the doors not pretending we’re the “gatekeepers”!

BeholdIstandatthedoorandknock

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in actuaries, Consolation, corporate governance, dc pensions, defined aspiration, Fiduciary Management, Financial Education, First Actuarial, hargreaves lansdowne, pension playpen, pensions, Retirement and tagged , , , , , , , . Bookmark the permalink.

7 Responses to Pension agnostic?

  1. Andy Heath says:

    Henry – I agree with your sentiments about how we should be doing this, but question the semantics (would rather not get too mixed up in the theology…) Just because we agnostics say you can’t know of the existence of God (or gods), doesn’t mean we don’t know what Good is. The religion thing is just an insurance thing for the uncertain. Oh, maybe you’re right, perhaps we should try it that way, too.

    PS – I know of one company that’s providing free advice to auto-enrollers, so that they can meet them to be able to offer financial advice more generally…

    Andy Heath

    for Charles Derby Financial Services

    Andy Heath

    Branch Manager

    Charles Derby, Cranbrook

    Tel 07811 434 415

    Tel 01580 715 554

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