Insistent clients is an issue which I, as an observer of the financial advice world, find extraordinarily difficult because I am constantly pulled by the conflicting viewpoints.
Each party to the argument can make a strong case and that is why we are at an impasse.
But this issue is not going to fade away.
Fos has already received more than 600 complaints from consumers who have been unable to find an adviser willing to facilitate a pension transfer.
Keith Richards, chief executive of the PFS, says he discussed the issue with the government in March. Eight months later the problem looms larger than ever.
As more people wish to access cash from defined benefit pensions, the three-way conflict between consumer, adviser and regulator is likely to intensify.
I suspect many advisers view this as a doctor might when faced with a patient in the early stages of cancer who insists on a homoeopathic solution. Or a solicitor whose client wants to go to trial when there is a very good plea-bargain on offer.
And though some have painted it as a regulatory question, for many it is also a matter of morals. How can you sign off a transaction that you know is not in the client’s best interests, even if you do not fear future regulatory reprisals?
Some consumers are looking for facilitators rather than advisers. But how can someone understand what they are sacrificing without the benefit of advice?
The spectre looming in the background are the crooks who are already working overtime to relieve pensioners of their life savings.
The spectre in the background are the crooks working overtime to relieve pensioners of their life savings.The cost of advice – accepted or ignored – is also a key issue – especially as evidence is growing that it is the smaller pots that will more likely be cashed in.
Consumers are concerned at losing so much of their life savings for advice they feel they do not want.
But why should an adviser work for peanuts – and then risk being hauled up for giving inappropriate advice?
For now it will come down to the willingness of individual advisers to transact – but what is really needed is for someone in government to take responsibility and address this issue.
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We’re not going potty over here
A report from the Social Market Foundation – an organisation favoured in the past by both John Major and Gordon Brown but now studiedly non-political – attempts to apply lessons from Australia and the US to the UK’s pension freedoms.
Typical scenarios highlighted range from the very cautious who spend less than 1 per cent of their capital each year to the reckless – representing four in 10 Australians – who run out of funds by age 75.
The report suggests the government monitor retirement decisions to provide a view on long-term outcomes for consumers and state.
Meanwhile, the ABI has revealed that £4.7bn has been withdrawn under new pension freedoms since April.
However, more than £5bn has been invested in drawdown products and annuities.
Where pensions are taken as cash the average is just under £15,000, suggesting that while smaller pensions are being cashed in, larger ones are being invested.
There is only anecdotal survey evidence for where the withdrawn money ends up.
However, where it is being used to pay off debt, surely this is a better use for smaller sums than investing in products that will produce next to no income.
And even if it is being spent on housing and holidays, then this option must be preferable to borrowing to fund the same activities.
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Dodgy calls make banks look phoney
Why do banks and building societies so often behave like fraudsters when they attempt to contact us.
On Sunday morning I began to receive calls designated “no caller ID” and a strange 00 number.
I ignored them, but as they persisted I eventually answered only to be greeted by an automated message claiming to be from Nationwide and asking me to press any key so I could provide personal information to the fraud department.
I hung up suspecting fraud. I later called Nationwide which confirmed it had made the calls.
They claimed to have called initially 7.48 – when normal people are still asleep.
As it happened there was no fraud but merely a transaction hashed by the appalling Verified by Visa, which appears designed to make life difficult without adding to security.
I have suggested to Nationwide that if it wants people to answer calls it should have a landline number appear on the phone and try to behave more like a bank and less like an ambulance chaser or fraudster.
