There is a problem in financial services with “intermediation”. It’s a horrible word!
But putting that aside, there is a temptation for every Tom, Dick and Harriet to stand between the customer and the investment.
Pension PlayPen is of course a layer of intermediation, we charge a fee to help employers choose a workplace pension and we need to justify the price we charge.
Infact we have more than one price, we have the expert price which is for wholesalers that can take large numbers of employers through staging and we have a retail price for individual employers doing it themselves.
Our expert intermediaries (who we call agents) are either financial advisers or accountants and their payroll managers. We are pretty clear about who we want to deal with, intermediaries who know what they are doing and use ours system properly. We charge more to employers who need more help to become expert!
In theory at least, using an expert is cheaper as the employer doesn’t need to learn the intricacies of choice and can do better using an intermediary to “outsource”to.
But there is another kind of intermediary we are less happy with. We are uncomfortable with the behaviour of some trade associations who charge members fees to be in the club and then demands a slice of the profits of their commercial partners to get access to this membership.
This doesn’t seem particularly transparant. On two occasions this summer, Pension PlayPen has submitted itself to the scrutiny of two professional bodies on the understanding our service would- subject to scrutiny- be endorsed.
On both occasions we have been approved by those doing the scrutiny and on both occasions we have been subject to a commercial squeeze demanding we offer our service at a price we cannot meet.
I have written to these professional bodies explaining that we work with practicing intermediaries (practitioners as the professional bodies call them).
In retrospect, I wish we had been clearer at outset that we need to engage with trade associations and professional bodies in a different way to practitioners. I would not expect to pay the Pension Regulator or the FCA to promote choice – nor do I expect this from professional bodies or yet trade associations.
But this is part of the learning process!
I very much hope that those bodies who promote best practice do not compromise those aims through their commercial activities. Last week I spent two days with the CIPP and returned refreshed by its positive attitude to delivering best practice in their interactions with the pension industry.
There are other institutes who can learn from the CIPP.
If you would like to find out more about Pension PlayPen pricing and whether we might offer you “expert” rates, either as an agent or as a practitioner within an employer, please contact me – Henry Tapper on 07785 377768 of firstname.lastname@example.org
Intermediaries can be good, necessary and add value. The problem is where we do not let people choose multiple intermediaries or intermediaries for some but not all transactions. The even bigger problem is when intermediaries down grade other intermediaries. Keep someone in a “walled garden” and they will look over the wall to see if there is something better. Open the gate to let someone wander in and out of your garden, they will keep returning to the sanctuary of your garden.
I get your drift Michelle!
We are forever trying the land grab and claiming groups of people (or employers ) as “ours”. If I added the claims of all the affinity groups to be key influencers of the auto-enrolment decisions, I think we’d have at least 10m employers in this country!
Many employers belong to a number of affinity groups and any claim on exclusivity has to bear in mind that we choose our intermediaries as well as our providers!
I share your frustration Henry. There is no doubt that the bandwagon for the provision and promotion of auto enrolment advice services is very large. It’s also growing as trade associations and others see an opportunity to make money from their membership and subscribers. I blog requently and post on Linkedin Groups that I follow, ok there is a degree of self promotion by the very fact I blog but I also offer invaluable support and information for free (as well as the odd opinion). Recently certain groups that pre apporve blogs before they can be posted have not approved my blog. Given that other groups have posted the same blog I can only assume that my blog threatens a vested interest for some. Perhaps a combined campaign of actual automatic enrolment service providers will add some leverage?
Don’t worry Stephen, you are not alone! Moderating the pension play pen group I have to approve posts for great people like you, Michelle Cracknell, Alan Higham. I also get moderated. This isn’t the real problem though, what’s really wrong is when organisations profiteer, milking their good name to cash-in on auto-enrolment- far too much of it going on – especially of the scare-mongering variety.