Recognition for Al Rush and for Chive, but have we learned Port Talbot’s lessons?

Al Rush

Al – doing what Chive does

It was good that Chive received recognition from the IFA community at last night’s Money Marketing Awards.

It was no surprise that Al Rush’s Chive won, though a bit of a surprise to me that I was chosen to collect it – especially as many of the Chive advisers were in the room.

Keith Richards (pictured above) is one of the good guys, he has brought the Personal Finance Society out against the bad practices that let the problems at BSPS happen and it was good to hear him speak on the subject

The award was passed quickly to Al Cunningham, a Chive adviser, and so to Al Rush, who was last night in Rutland, keeping out of the way.

My admiration for Al Rush, his moral compass, his dignity and his work ethic are well known.

Port Talbot’s lessons still unlearned

The opportunity to install an IFA network in various parts of Britain with high concentrations of BSPS members – Port Talbot, Redcar, Shotton and Motherwell was missed.

It was offered in June 2017 to the Trustees of BSPS at a meeting of BSPS Trustees and their advisers.

The advisers recommended instead that a guidance helpline was put in place. Nick Flynn and the LEBC team that led that helpline, were also given an award last night.

They did a great job for steel men, but they had to make a silks purse out of a sow’s ear.

The recommendation at the meeting I attended was clear, practical help from qualified advisers was and would be needed during the BSPS’ member’s time to choose.

We now know that the rush for the door started in April. By June – the Trustees would have had clear sight of what was going on. Why did they choose to ignore the danger signs? The answer is between them and their advisers.

Our recommendations were rejected and the service that Al delivered from the final weeks of Time to Choose, only came after the interventions of Frank Field, the publicity from the FT’s Jo Cumbo and the work that Al did on the ground.

We now kid ourselves we have learned the lessons of Port Talbot, we haven’t,

The ONS numbers tell a different story

On the day that these awards were going on, the ONS published their revised  transfer numbers for 2017 and gave us new numbers for Q1 2018

I have been told (by a Government source) that the estimate of how many actually transferred from BSPS to personal pensions could be as high as 8,500. The amount transferred out of BSPS will almost certainly exceed £3bn.

The BSPS Trustees and all connected parties are slowly waking up to fact that more than 20% of those with transfer values chose to walk from a perfectly good scheme.

The limitations of the Integrated Risk Management Framework

Port Talbot was not alone, nor BSPS alone as a scheme. The mass migration of people who had previously been due an escalating income for life and a guaranteed tax free sum from their defined benefit pension scheme, happened all over Britain. BSPS was just the most visible example of a failure to protect vulnerable people.

Both the FCA and tPR have a duty to protect members, something that Lesley Titcomb admitted yesterday, may not have happened as it should have.

Somewhere in the great abstraction that is the Regulator’s Integrated Risk Management Framework, the statutory objective of protecting members got lost.

The lesson of Port Talbot will be learned, when IRM includes the vulnerable member in its equation.

The perverse consequences of “democratising advice”

The decision by the  FCA that has allowed advisers such as SJP and Tideway to ride a coach and horses through RDR and advise on transfers using contingent charging has turned out badly.

Tim Sharp of the TUC makes this point well here. The reports of the damage that advice that simply unlocks transfers with no friction – is outlined in the article behind the link.

The FCA are now wondering whether they should ban contingent pricing. If they needed anything to help them do so, it is the numbers coming out of the Office for National Statistics yesterday.

If they want to know what is happening, ask Accord, or Balpa or Prospect, or just ask Tim.

Those who offer friction-free advice are still doing it and doing it on an industrial scale. The PI insurers are asking questions but the FCA is sitting on its hands , agonising as to whether, banning the sale of SIPPs to people who should be in pension schemes could be deemed harmful to their interests.

Let’s make it clear, the use of contingent pricing is not a philanthropic practice, it is a calculated tactic to increase revenues and profits at advisory firms who should know better.

No lessons learned yet.

In a couple of weeks, advisers will be re-assembling for Al Rush’s second great British Transfer Debate. You can find out all about it here

Al Rush has been teaching the lessons of last year ever since we first drove down to Port Talbot. Have we really listened?


About henry tapper

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