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