Time for the insurers to pipe down and get on with it!

Pipe down


I like Jamie Jenkins of Standard Life, he’s a canny operator who shapes arguments to suit Standard Life very agreeably.

His style is laconic, his humour dry and his observations are succinct and to the point.

So I enjoyed reading his latest blog in Adviser Lounge while being vexed such subtle messages as this;-

The UFPLS abbreviations will have their place, but the tax implications for many will be unattractive, once fully understood.


Nor do I profess to understand the costs of providing advice better than advisers. Definitely not. But it’s ok to explore a hypothesis based upon the market demand, I think.

Of course it is the job of insurance company marketing departments to determine what products they bring to market and of course they will try to influence distributors to see things their way.

But I am worried not just that Standard Life, but Scottish Widows and Aegon are all pushing in the same direction- to limit the choice of in retirement options, not just UFPLS –(Flumps) but CDC.

Whether, it Jamie’s subtle dismissal of Flumps , or Scottish Widows cri de Couer in the Telegraph or Aegon’s general attach on change, there appears a concerted attempt by the Scottish Life companies to resist the pension freedoms or at least circumscribe them with product types that meet their existing system capabilities.

What is clear that whether you go the Flexible Annuity Drawdown route (what Jamie calls FAD) or the UFPLS route (what we call) FLUMPS, somebody is going to make a lot of money out of your savings.

1% of even a “meagre” £30k pot is still £300 a year, add to that all the incidental charges that surround drawdown and the small pot is a tidy little earner (so long as it isn’t spent).

Multiply these figures by tens of thousands and you see the scale of the revenue opportunity for those dispersing people’s assets.

Where there is money to be made, there should be competition and where there is the potential to waste a lot of money, people will take advice.

I don’t see this as difficult. Insurance companies are going to benefit from the new pension freedoms as they lost from the demise of annuities as the mainstream decumulator.

Why then are Standard Life and their peers making such a fuss?


Given that the stated point of a pension is to provide an income, there is an alignment of interest between those who advise, those who manage the pot and the saver “not to spend it all at once”.


So it makes sense to make income attractive and that means more than silly acronyms, it means the pension providers coming up with really good product that does what it says on the tin,


Pensions are never going to provide the immediate gratification of a phone, they won’t be “sexy”, but if you want to upgrade your phone you need money!


Faced with the prospect of not having enough money (to buy phone upgrades or whatever) people will engage in how to remedy the situation,


Assuming providers come up with good product and there is a fair choice of retirement income options, why wouldn’t people want to become “money spending experts”?


Put in stark terms, the difference between getting the retirement income decision wrong and right could be the difference between Poundstretcher and the iphone 6.


What makes the at retirement decision different- and why advice and guidance will be popular, is that people don’t have to wait 25 or 30 years to see whether they are right, the proof of the advice we give people at retirement is tested pretty well from day one,


The challenge for providers and advisers is to engage people with the difference between spending it all at once, using FAD, Flumps or even transferring to CDCs- the terminology may be weak in this response, but we can translate the benefits and pitfalls of these choices In terms that people like me can understand – BECAUSE THESE RETIREMENT FREEDOMS ARE  UPON US!

About henry tapper

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