Contrary to providers, advisers spoken to by FTAdviser have not seen an increased amount of enquiries relating to the new pension freedoms that came in earlier this week.
As FTAdviser reported yesterday (9 April), many of the major life and pension companies have had similar call volumes since the start of the week. Volumes are significantly up on previous weeks and years, however enquiries appeared to be mixed.
Many small pot owners were looking to cash-in as expected, but those with larger sums split between partial encashment and drawdown options, while many are still confused about what they are now entitled to.
Graeme Mitchell, managing director at Lowland Financial, added that within the first week he has only had two enquiries.
“One was off the street asking about selling tiny annuities - which I had to explain was not possible for a year - and even then unlikely to be worth doing in view of the trivial amounts. And one from a client keen to get the majority of money from his pension to develop a new business project.”
However, he added that a significant number made pension contributions before 6 April, “which implies that people are getting the message about pensions being highly tax efficient and now very accessible/IHT friendly”.
Malcolm Coury, founder and managing director of Money Wise IFA, said he had not had any client contact specifically related to the pension freedoms yet this week.
“We’re not actively promoting it either, although we have put together a proposition and various tools, including calculators to be able to deal with the advice requirements.”
Adrian Murphy, Murphy Wealth partner, stating he has had several enquiries from clients with relatively small pension pots looking to withdraw funds.
“The problem is we don’t see these clients on a regular basis so we are going to have to arrange a meeting and charge them a fee to carry out the appropriate advice process.”
Greg Heath, managing director at Derbyshire Booth Financial Management, said things have been split between the ‘normal’ clients who “have read the media and understand the basics but realise they are not equipped to analyse all the legislation and need expert help” and those more insistent clients “who want to cash the fund in to pay off debts, go on holiday or help kids out”.
The latter are those that compliance departments are telling advisers to stay away from, he commented. “They will come back to bite you, and claim against you possibly, so we are turning them away and pointing them towards the Pension Wise service or pension providers direct.”
Mr Heath added: “I am still awaiting the pension fund cash in to buy the Lamborghini; personally the hot hatch might be a little too much for some clients blood pressure I suspect.”