I’m found here talking to Money Marketing’s Justin Cash about pension scamming and financial resilience. It was a good day to speak as we’d just launched our anti-scam game http://www.scam-man.com.
Doing a podcast by Zoom (I think it was Zoom) is weird. Prior to Lockdown, you’d physically get to the meeting, think about what you are going to say and deliver an accomplished performance with the help of your compliance department.
This conversation appeared as a diary item, popping up in my calendar 10 minutes before we went live with the WeWork server flickering on and off. If I sound a little discombobulated at times, it was because I was frantically trying to find enough signal to keep my conversation with Justin going!
But back to my theme, I was asked whether the Pension Regulator’s extra letter to those executing DB transfers was going to be effective. The problem is simple – many people don’t read the letters they get sent, they get warning fatigue.
We found in Port Talbot that one of the most effective tactics of Active Wealth Management was to tell punters they’d be getting a pile of letters from the British Steel Pension Scheme and the FCA warning them not to transfer. What the steel men heard was that Tata were trying to stop them get their money, the warnings made it worse.
What people wanted was someone to talk to and that’s what people thinking of transferring want today. I’m pleased that the FCA and tPR are giving help to pension administrators on what they can say to pension scheme members at this time. I’m pleased that many pension administrators continue to work from home and – like me – find themselves speaking on important matters outside of the workplace.
In such a time as this, there is no time for shilly-shallying. If a pension administrator spots a scam -whether on a DB transfer or anywhere else, he or she has a responsibility to raise a red flag.
There are of course rules that must be followed and they include the Anti-Money Laundering rules about tipping off. But there are also rules around how we treat vulnerable customers and at this time of lockdown, the assumption must be – that everyone should be treated as potentially vulnerable.
What I am saying in the podcast, which despite my incoherence is brilliantly managed by Justin , is that at this time, we need to step up and take responsibility for the protection of people’s pensions – especially where we see financial self-harm.
The very best IFAs do intervene and stop people busting their LTA protections, missing out on Guaranteed Annuity Rates, triggering unnecessary exit penalties and overpaying advisory fees. People like John Mather and Al Rush fearlessly prevent self-harm.
But at this time, we must recognise that sometimes , a withdrawal from a pension scheme , even if it creates a tax-hit or is struck when the market is particularly weak, must be expedited. When money is needed quickly , then it is the responsibility of all intermediaries to ensure that the supply chain isn’t blocked.
Here I am aware that the customers interests and the advisers are not necessarily aligned. Where the adviser preaches financial resilience to avoid his losing client money from a pension withdrawal, then it could be argued that the scam is in the delay. i wrote yesterday about why we cannot allow the phrase “financial resilience” to become a justification for delaying the necessary payment of money.
There is a very simple rule in all this, it is that transparency is the best way forward.
Which is why I love these new rapid response podcasts. Being put on the spot to say what you think at a time when you have none of the usual support mechanisms means that you have to take responsibility. It’s scary and it’s rewarding and I urge you to listen to what I’m saying by activating the podcast link at the top of the blog.
I also advise subscribing to future blogs (by those more coherent than me) by pressing this link