I’ve dug myself out from the “blizzard” of consultations , responses and calls for evidence from Government and I’m now sitting on top of the mountain hut trying to work out what is going on.

A good way to work that out is by consulting Tom McPhail who sees things through a different lens to me , but generally has his binoculars trained in the same direction.

Today’s Update is from @PensionsMonkey, with his thoughts on the announcement from “Jeremy ‘Del Boy’ Hunt” telling us we’ll be £1,000 richer in retirement, the blizzard of government policy papers around pensions, and whether any of it matters anyway https://t.co/eSgcdzM5fa

— the lang cat (@thelangcat) July 12, 2023

Blizzards and Avalanches have left us with a clear view out over the new landscape and it’s best defined by what it isn’t. The new pensions landscape is not defined by

WEALTH

TAX

INHERITANCE

SELF INVESTMENT

ADVICE

PLATFORMS

The new post blizzard landscape is all about virginal white pensions, provided collectively by pooling.  And Tom McPhail spells this out to the IFAs who form the bulk of the Laing Cat’s readership

The first theme was the headline stuff around investing in private equity, illiquid assets and infrastructure. The government really, really wants some of that sweet £2.5 trillion the pensions industry is hoarding, Smaug-like, idling slumbering on its mountain of loot when all that money could be helping the economy, boosting jobs, growth and votes. 

The other theme was tighter standards, accountability and consolidation. Again and again across the policy papers was the recurring message of fewer, bigger, better-run schemes. There were too, repeated nods across to the FCA: these reforms may have been primarily directed at the trust-based occupational sector but it is wildly improbable they won’t leach across into contract-based pensions such as SIPPs and GPPs. Once upon a time the FCA and TPR barely acknowledged each other’s existence, let alone spoke to each other. These days, the regulatory entente cordiale glows warmer than a Parisian dustbin during the riot season and over in contract-based pension land we should take heed. This theme of tighter standards, accountability, consolidation, and fewer bigger pension providers is very much a thing of which we should be mindful.

There is a substantial proportion of the population who do not need pensions and would prefer wealth. Sadly a few people have swapped pensions for wealth and may regret it but by and large wealth management and pensions are congruent. Most wealthy people value their pensions and so advisers cannot ignore the Mansion House Reforms.

As Tom points out, the concept of VFM will be extended to self-funded personal pensions, CDCs will inevitably become investment pathways and the store  of productive capital in private markets will open its doors to IFAs – most probably through LTAFs.

But the idea of a pension as a stream of payments that lasts as long as we do, is implicit in much of what is being consulted on. Inevitably this will present a challenge to the individual wealth model and require advisers to revise their consumer duty constructs to ensure that clients are appraised of collective alternatives.

The FCA is indeed looking at VFM as part of the consumer duty framework and many of an IFAs clients have responsibilities to ensure the workplace pensions they offer their staff are fit for purpose.  Value based on “outcomes” means accountability for performance, costs and charges and service quality. This will inevitably apply to the management of wealth as well as pensions.

On top of our  huts

Tom and I may be on top of different huts but we are looking at the same landscape. When you stop reading consultations and have a look around – it’s peaceful and a good time to take a deep breath of pure mountain air!