Billy is a national treasure – this is the text of an article that first appeared in Money Marketing
There is clearly a national state of emergency, but there is also a financial emergency for those approaching retirement with a money purchase pension and the over 70s who are at high risk of suffering the worst effects of Covid-19.
As the well-known pension commentator Henry Tapper wrote: “pensions are about people’s lives and older people are living in particular fear right now”. Justin Cash, editor of Money Marketing, tweeted; “We have all been caught with our pants down: @BillyBurrows on lessons for IFAs from the #coronacrisis”.
There is a national pension emergency as many people have seen the value of their pension pots fall significantly and are worried if they have will have enough money to retire on. The average mixed investment pension fund is down by about 20 per cent since the beginning of the year and could fall even lower.
While this may not be an issue for younger people as they have time on their side, it is a real issue for those over age 55 who are approaching the time when they will be looking to convert their pension pots into cash and income.
It is only the financial aspects of the coronavirus induced stock market crash which we need to worry about, we must also worry about the emotional and behavioural aspects because anxiety and fear may result in irrational behaviour and poor decision making.
How to help the over 55s at a time of national and financial emergency
Everyone who is concerned about the effect falling fund values will have on their retirement plans should be able to speak a qualified and regulated adviser.
No matter how small or large their financial assets everybody who needs financial advice should be able to get the appropriate advice.
There are other sources of help available, e.g. from the government’s Pension Wise service or from pension providers, but good as these are, they cannot give people what they need the most. What most people need at times like this is someone with whom they can have a frank discussion and get practical advice or get a second opinion about what to do next. If this results in changes to their investments or new solutions, they want someone to arrange this for them.
A guidance service cannot give an opinion or tell people what they should do. People are left to make their own decisions and make their own arrangements. Whereas an adviser will help them make the right decisions and take care of all the arrangements.
It can be difficult for the over 55s to get the appropriate level of advice
There are many reasons why the over 55s don’t get the financial advice they need and deserve.
Speaking to a financial adviser can seem scary and the process may appear to be complex and expensive.
But good financial advisers can give people advice in a way that is client friendly, uncomplicated and value for money.
The elephants in the rooms are trust and costs. Advice doesn’t have to be expensive. The cost of advice is the cost advisers incurred in giving the advice plus the ‘added value’.
Those who think advice is expensive and of little value when times are good should think differently when times are difficult.
The value add is measured not only in financial terms but also in personal terms. How much is ‘peace of mind and financial security’ worth?
Financial advice should be available to everybody
At Better Retirement, we believe that everybody should have access to financial advice no matter their amount of financial wealth or circumstances.
In order to make financial advice available to as many people as possible we have launched our advice hotline and are offering a free initial consultation to anyone who is concerned about their pensions or retirement plans. There are absolutely no strings attached and we don’t expect people to appoint us as their adviser if they don’t need our services.
Our advice services are available to everyone; those with workplace pensions, personal pensions and self-employed pensions.
Sceptics may ask why a financial adviser would want to give advice to the mass market rather than concentrate a small number of high net worth clients.
I go back to Henry Tapper’s comment; ‘pensions are about people’s lives and older people are living in particular fear right now’ and at times of a national emergency it is only right that we do everything to we can help those who are need advice at these worrying time.
To anyone who questions my motives, I remind them what a previous pension minster told me: “we have the scars on our backs to show our commitment to be the customer’s champion”.
Billy Burrows is retirement director at Better Retirement
Follow him on Twitter @BillyBurrows
Henry Good article.
The major barrier to getting the advice in a timely manner is the latency period
between first contact and known uKnowns being determined.
We estimate this to be a cost of £1,500 though it could be less for simpler cases. However the delay is still there even with the simplest of issues and we are talking 10 days minimum to six weeks for multiple policy holders
It’s not just a cost issue it’s the loss of momentum with an individual who is concerned that the delay is disinterest or poor service blamed on the contact point.
I have not looked at annuity rates for a few months but the last RPI linked with 10 year younger spouse for a 72 year old would take 34 years to recover the cost assuming no tax payable on the annuity income Clearly gilts are an issue possibly to be replaced in this market with a FABBI or smoothed product or like a PLA the income stream split into capital and income from a tax perspective
Keep refining your offering happy to help where I can