So what can advisers offer to corporate clients today?
Enough crystal ball gazing; what can actually be done? Let’s start with pensions. With the threat over higher rate tax relief, there is a massive opportunity to do high-net-worth financial planning before April, and probably before the March budget, in case any changes take immediate effect. Aligned with this is the reduction in the lifetime allowance to £1m so many more people will be affected. The reduction in the lifetime allowance affects protection too with Excepted group life schemes and Relevant Life policies offering protection against the loss of enhanced/fixed protection.
There is an advice gap here; the employer or pension trustee does not know the pension situation of its high-net worth population and so employers need help to get a clear strategy agreed. These range from telling everyone who is potentially affected by the change what is happening (and align this with information on the possible reduction in higher-rate tax) and confirm they need personal advice. Alternatively offering 1:1 advice or group workshops is a real employee benefit and in both examples an organisation has made things clear for the highest paid.
AE is an amazing opportunity and some advisers have already repositioned their practices as an AE implementation provider and are selling to other advisers. It is too late, as the market is already congested, to adopt this approach now but partnering with an AE platform or solutions provider is preferential to simply handing these off to a pension provider.
Any adviser looking to differentiate themselves, or to add value to the process, will do well by talking employee benefits rather than pensions as that will ensure on-going contact, remuneration after the initial AE pension implementation and retention of the client for other opportunities.
In the group risk world there are two themes: modernise the benefit scheme design and make the most of the additional value employers can have as part of the package.
The planned changes to the employment and support allowance (ESA) in 2017 mean that group income protection clients need to review their scheme design. There are legacy designs such as ‘integrated’ and ‘net pay schemes’ which need a much more urgent review than the simple State Benefits deductible scheme design.
