Planner’s paradise

Jeff Prestidge

After the Budget, advisers are on the brink of two revolutions where the sky’s the limit, so long as opportunities are not missed

If I were a chartered financial planner I would at this very moment be rejoicing in the nearest champagne bar, popping a cork and toasting chancellor George Osborne.

After hero-worshipping George, I would then be raising a glass or two to the understated – but hugely radical and intelligent – pensions minister Steve Webb, before ordering smoked salmon and caviar blinis. Heaven. Nirvana.

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Why the bubbles? You know why. Radical change is occurring in the personal finance world, and when this happens, opportunities for financial planners to excel – and demonstrate their considerable wares – abound. Seize the day.

Not once in my long career have there been two revolutions in such close proximity, changing so dramatically the personal finance landscape. Maybe you could argue the advent of both Peps and personal pensions in the late 1980s (thank you Margaret Thatcher, rest in peace) were equally landscape-changing, but I think the double revolution now on our doorstep will be seismic.

So, first, we have the pensions revolution announced 12 months ago and about to hit the streets when the new tax year swings into action on 6 April. And a year from now a savings revolution will begin as tax on savings (a tax I have never agreed with) of up to £1,000 is swept away for millions of people, either still working or enjoying retirement.

No wonder The Daily Mail took the opportunity on the day after the Budget to announce that the ‘sun shines on savers’, illustrating its front page with George Osborne’s face beaming out of a blazing sun. Not a pretty sight, I hasten to add. In fact, it reminded me of Little Weed from The Flower Pot Men (Bill and Ben, George and Steve).

We have known about most of the changes impacting on pensions for more than a year. And the numerous financial advisers I have met in champagne bars over that period have been enthusiastic about the pension freedoms coming our way – and the tax planning opportunities.

Some have been so turned on they have already written books on pension life post-5 April 2015 – Nick Bamford of Informed Choice, for example, has cranked out: ‘How to take your pension pot: a practical guide to your retirement options’.

Others are busy reinventing themselves to make themselves more marketable in the new pensions world. One adviser I know is soon to launch her own pension freedoms-friendly website and has embarked on a 90-day writing course. Her mission post-course completion is to write the definitive user-friendly guide on pensions with a view to attracting new clients on the back of it. Clever. Very clever.

The additional pension changes announced in the Budget provide further opportunities for advisers. The creation of a ‘market’ in annuities next year will enable five million annuitants to think about exchanging their regular income stream for a one-off cash payment. Although most will quite rightly be reluctant to surrender a guaranteed income, there will be opportunities for advisers to demonstrate their expertise and provide some annuitants with better outcomes.