Making a buyer’s market for pensions

Which

Organisations such as Which have always charged a subscription for their research. Those prepared to pay a regular monthly amount built libraries of reports which help us purchase everything from groceries to credit cards. Which put its readers in control- made them good buyers -made buying sexy.

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More recently, consumer research has reached a wider audience, through www.moneysavingexpert.com which has become an online resource for all types of people, rich and poor, savvy and inept. Martin Lewis’ stroke of genius was to demonstrate time and time again that he’s on our side. When he tells us he is making money, he tells us how much , we feel there is a price there, but a price worth paying. Martin makes money saving experts of us all.

mse

There are very few professional firms who have properly mastered the provision of on-line services paid for  through a paywall (Paypal,Sagepay etc). Google “on-line conveyancing” or “on-line accounting” and you get a number of offers , many at a clear fixed price. But this is a murky market reliant on professionals who know what they are doing.

But google “online pensions” and all you get a clutch of Government websites and offers from insurers waking up to the 21st century. Where is the research and the route-map that “Which” or MSE gives you to enable to start and complete your purchase simply and thoroughly?

I know you ‘re awating a flabby crescendo where I advertise www.pensionplaypen.com (there I just did) but let’s think wider than that. We need a new sales model.

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When a company purchases the know how to do something, whether it’s a legal service, accounting or pensions advice, it is asking to get a job done. If you are a lawyer, you do not  add £10 a month to the mortgage payment to get your fees paid, if you are selling payroll or accountancy software , you charge a fixed price (with an optional maintenance package). People know how to buy and sell and if they don’t want to pay their estate agent 2% to sell their house, they negotiate. At least they know what they pay and can assess VFM.

Financial Services has got to get in line with other services if it is to be trusted

Financial services companies are obsessed with charging for their services over time. The only online adviser I found on the first two pages of a search for an online workplace pension , concluded its initial pitch

We work on the telephone and through emails which means we can keep our costs down to £100 per month.  With one payment of £100 and a direct debit mandate to commence on your “staging date”

It seems a small amount but what’s this about? I go online to get things done and by and large I want to be in control. Why should I pay £100 per month?  Answer;-  So that..

you will no longer have the worry and stress of putting something in place, it’s now taken care of

It’s the same old problem with financial services- it’s all so hard you need an expert to take the problem away. But think of the logistics- 1m employers paying £100 pm to have their hand held? £100m a month, £1.2bn a year to make auto-enrolment work?

This financial model doesn’t make long-term sense for anyone.

We have to make financial products clean and that means doing away with our obsession with creating an annuity stream from a defined client bank.

Like Which and MSE, those of us who are selling a limited service should not talk about “our clients”, rightfully they are our customers, they become our clients when they voluntarily return to us to buy again.

The key differentiator between www.pensionplaypen.com is that we don’t want an income stream from our customers. Sure, we’d like repeat business, who wouldn’t? But our model is “purchase and go”. We have 1.2m customers out there who need to purchase a workplace pension. They can purchase badly or well, with us we’d like to think they’d purchase well and we charge £499 +VAT to make sure the service is good and remains good.

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No kickbacks, no inducements, no commissions, the money is paid by the employer.

If an employer wants to avoid paying the £499, they’re welcome, we aren’t going to come after them with pitchforks demanding a pound of flesh. We’ll be pleased to have helped , though sorry not to have helped more

And we don’t offer any guarantees. We do not guarantee satisfaction because we cannot guarantee satisfaction, we offer our “best endeavours”, or as non-actuaries would say “to do our best”.

It is not just advisers who’ve got it wrong, purchasers have got it wrong. The OFT’s collective jaw dropped when they saw how bad UK employers were at purchasing workplace pensions for their staff.

The answer to better purchasing is better selling. Selling a service which relies on research and is pitched at solving a specific problem does not require remuneration over an extended period (think conveyancing).

The great achievements of Which and MSE is that they’ve made a buyer’s market. With 1.2m employers still to stage auto-enrolment and 200,000 new employers born every year, it’s time we did the same with workplace pensions.

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Have a look at www.pensionplaypen.com again, it’s changed – we hope it’s improved- we’d like your feedback!

Oh and click www.pensioinplaypen.com/register while you’re there – that’s the closest we want to get to you!

 

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Making a buyer’s market for pensions

  1. What’s up, everything is going perfectly here and ofcourse every one is sharing
    facts, that’s truly good, keep up writing.

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