Bridging that advice gap – 43rd London Pension Lunch

hi res playpenThe Fourty Third London Lunch of the Pension Play Pen was scoffed at the Counting House pub on Tuesday 7th May. Under the knife, the advice gap left by the implementation of the RDR and the impending Tsunami of employers looking to set up and upgrade pensions in readiness for auto-enrolment.

Present were

Simon Leyland

Chris Brown

Clive Worlock

Andrew Clotworthy

Charles Tatham

Steve Barker

Vivi Friedgut

Gallia Grimston

Apologies were received from a number of people and none were accepted (joking).

Simon Leyland was first to the hustings and spoke on behalf of the auto-enrolled member who he claimed had no access to individual advice post RDR. He and his colleagues painted a grim picture of employers battening down the hatches to comply with regulations and no little more.

This was clearly bad news for those with an interest in offering funds into the workplace and Andrew Clive and Gallia all spoke from different perspectives about the difficulty in getting engagement from platforms of the gatekeepers to those platforms for new investment ideas. For them, the advisory gap centred on investment consultants stifling innovation.

It was heartening to hear optimism from Andrew about successes his firm were having providing sophisticated investment services to professional services organisations and there was general agreement that the advisory problem centred not on the organisations who have the resource and demographics to attract top quality advice but the 1.2m employers in the UK who haven’t.

Vivi Friedgut spoke eloquently about employee and employer engagement in pensions in Australia and gave personal testimony about her high engagement with the Super fund she had left behind and the DC funds she had built up since arriving on our fair shores.

The question was posed by the Chair at what point people would start engaging with their DC pots. The consensus was that once someone had accumulated £100,000 in pension savings, they had a pot worth the P*ssing into (though we clearly were a lot better off than the average DC pot holder who accumulated c£27,000 over a lifetime). Perhaps our pensions affluence was a reason we were at the lunch.

Hannah Clarke gave an interesting alternative on engagement, for her it was not the size of the pot but the proximity of the person to retirement that created engagement. It was generally agreed that people would increasingly have to find out what made for good themselves.

Once the concept of self-service had been introduced there was no stopping the conversation. Steve Barker pointed out that the advice gap really centred on the decision makers on workplace pensions (the employers and –where appropriate their pension trustees).

However Simon pointed out that by 2014 there would not be enough advice to go round even for employers. He suggested that the only way employers would be able to access proper information necessary to decide on their Qualifying Workplace Pensions.

Vivi suggested that employers might well, as happened in Australia, be goaded into finding out what made for good and go beyond the limited compliance approach introduced by Simon because of pressure from disgruntled members (a pension’s spring?).

Steve Barker was wary of individuals being given a little knowledge (it being a dangerous thing). He argued that were they to find out that the pensions they were in could be bettered, they would opt out of their QWPS.

Vivi and others were more optimistic, reckoning that employer power might be a way of driving standards up.

The meeting concluded with words of encouragement for which lunchers vowed they would visit , newly opened as it was.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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