In my student days, way back at the end of the last century, we would all gather round the PlayStation in my mate Kev’s room in halls and idly speculate about the wonders of the technology before us.
We would muse about where it was going and dream – as students are wont to do – about the unimaginable delights that the future held.
It was obvious then that all technology was consolidating, with electrical appliances beginning to branch out into the spaces previously exclusively occupied by other appliances.
You remember those little televisions with a video recorder built in, which looked suitably space age, but were kind of limited in that you could only record the channel you were already watching? That sort of thing.
Occasionally we would play CDs on the PlayStation and fantasise about a day when one device could be our stereo, TV, games console, radio and teasmaid.
But actually what happened that none of us foresaw was that our phones quietly started doing all these things as well as taking on the jobs traditionally done by print media, cameras, faxes, the A to Z, answerphones and everything else.
Within 20 years of none of us even owning a mobile phone, it has become the only device we really need. It may be challenged in the near future by glasses, watches or any other wearable tech, but for now, even my mum is quite dependent on her phone, even if she can’t quite use everything on it.
In the personal finance space there have long been calls for traditional platforms to go beyond simple investments. Of course, many currently don’t even offer the whole investment landscape, shunning investment trusts, ETFs and other not exactly niche vehicles, never mind the whistles and bells from elsewhere in the planner’s armoury.
Pensions now have the opportunity to offer just about everything a consumer might want to do with a financial planImproving the platforms
Despite spots of progress (Nucleus offers a limited protection offering and some of the larger life offices have made a handful of their protection products available through their platforms) in recent years the market as a whole has been characterised by stagnation rather than innovation.
In their defence, this is possibly a result of them being too busy trying to meet the latest regulatory requirement and ensure all assets are clean, superclean, I can’t believe it’s not clean or whatever the latest requirement is, rather than actually working on anything creative.
But whether there are excuses for a lack of progress or not, the past few months have suddenly seen pensions freed up.
At the risk of stretching my metaphor beyond breaking point, a pension is no longer the old plug in the wall, dial phone that we used to keep in the hall; it is developing the potential to be the iPhone 12, the Samsung S9, or whatever number still sounds up-to-the-minute when you get round to reading this, while many platforms don’t even let you play ‘Snake’ yet.
Changes already announced this year meant pensions could branch out to give access to buy-to-let mortgages, investments, care fees and more, all the while still offering annuities, drawdown and the core elements that they always have. George Osborne’s most recent announcement now means IHT planning can also be thrown into the mix.
Pensions now have the opportunity to offer just about everything a consumer might want to do with a financial plan. Those pundits who have said that a pension will, to all intents and purposes, operate like a bank account are not too wide of the mark. Although it is a significant distinction to make that this will be a pension that operates like a bank account, not a bank account that operates like a pension.
There are arguments that there has been a recklessness in the speed with which new policy is apparently dreamed up and imposed.
The commonly voiced concerns about pensioners buying Lamborghinis have died down, but the threat that prompted them is surely more real now. The possibility of those in retirement running out of money is an even greater possibility, and one that, I suspect, any intervention from the Money Advice Service will do little to avert.
But this should represent another opportunity for proper advisers. Retirement has always been a key point in life where you can add value for your clients. Now you can add even more. You can ensure they make their retirements comfortable, do not run out of cash and maybe even have a bit left over to pass on to their families.
You just need to elbow your way in beyond the guaranteed guidance. But when you do, the benefits you can convey will be so tangible and demonstrable that word of mouth could do the rest. All you need to do is keep up with the changes as they come thick and fast (and hope they are more fast than thick).
Despite the haste with which these changes have been implemented, there is still scope for further development and, given the past year, you would be foolish to rule it out, but already the humble pension can offer access to just about every aspect of a financial plan.
Now if we could just find a platform that would allow you to exercise this flexibility…
