simon Chrystal

Simon Chrystal  is a phenomenon. He sends luck to the editors   of this podcast as he finishes explaining how WPS Advisory has give up on giving paid advice to 600,000 employees whose employers wanted him delivering messages to the staff they had given pensions to.

The reason for the pivot were unclear but they came amidst the torrent of information and opinion that came at us in 76 minutes. Two facts stuck h me

If they had the advice paid for them by the boss, one in five employees turned up to hear the advice, if they had to pay for the advice themselves, one in fifty paid for and listened to the advice.

I hope I’m not cynical in saying that 98% of people do not value financial advice on what to do before retiring enough to pay for it.

There is a long history during this century of IFAs being employed to deliver bulk advice to meet the needs of Employee Benefit Consultants to get ideas pas the Pension Regulator and the FCA. Typically these have involved “de-risking” pension schemes (aka transferring risk from the scheme and its sponsor) to the member/employee.

It has not turned out well for many IFAs. LEBC spring to mind and WPS advisory are doing well to get out before they follow the same dark path to ruin. Ruin may now come not from problems with the regulator but with the bank manager. When de-risking was needed to balance the book on DB plans deemed to be in deficit, getting an employer to stump up to protect the employer , the trustees and the EBC from the regulators  was fine. Simon quotes sums of £250,000 paid per project to the advisor as gold dust to the IFA.

But there is no longer the work – we have to suppose. This is not surprising as 75% of DC schemes are deemed to be in surplus and with different employees. The problem is no longer the risk and Simon’s firm no longer has the stream of work they were enjoying when Simon did his last podcast two years ago.

Instead, Simon has discovered that the clients that he has , have a quarter of a million pounds each and have them under the advice of WPS. The new model to which he will pivot is to make money on this money by finding a home for it , where it can pay his firm the income it needs to replace the lost income from giving the working person retirement advice.

This failure of the system is a regulatory failing (in Simon’s opinion) and he backs up everything he says with data that he has to hand. Infact this podcast is a 76 minute diatribe against the system that does not empower the working person to cease being the 2% who do and start being the 98% of people who don’t currently take advice on what to do from a proper financial advisor.

I know the provenance of WPS advisory and its funders and I must say I am surprised that this firm is lecturing us on value for money. I would beg to differ on the validity of  his  views on value for money for the working person when put in action.

It is a long and very tedious podcast where only Simon Chrystal gets a word in and where the listener is given no chance to hear alternative views from Darren and Nico.  I listened to the end and hope that we will return to paid advice as a topic for discussion. I am with the 98% who see no value in the money that is paid for it.

The boys are doing a podcast next week based on our questions. So far they haven’t got any questions and they’re saddened by this. I have a question for them which is apart from the obvious question why these podcasts aren’t edited down to an hour. My non-procedural question is this…

Should the members of DB pension schemes have a say in the spending of any surplus that pension scheme distributes?