OpinionApr 12 2018

Pension freedoms, jargon, and an ode to Steve Bee

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
comment-speech

I’ve never been one for putting my heels up – I’m saving that for retirement.

I’m also happy to kick the yoga, pilates and all the other mind, body, spirit stuff into the long grass, too.

But after 12 Seven Investment Management nationwide retirement-focussed roadshows, meeting almost 800 advisers, I’m having a moment of introspection.

My number one take away has to be Steve Bee. Not just for his dead-pan, dry delivery (a comedy calling surely beckons if pensions get boring). What sticks is much more serious.

Steve’s hand scrawled, tech-light presentation on the pensions crisis, time and again, was described by advisers as the best they’d seen.

As well as making me wonder why we all bother with power point, Steve’s presentation hammered home how unnecessarily complicated the industry makes everything. We don’t need to work harder.

We need to work smarter. And smarter does not mean more complicated.

It is crucial that we not only communicate better about retirement planning, and ditch the jargon – we have to have something to back it up, too.

We can all knock financial services jargon – words are easy. But talking the talk is much easier than walking the walk. Steve’s ‘Jargonfree’ presentation was an absolute masterclass in how less really is more.

I’m not sure what Steve makes of the new moniker coined for a hitherto-hidden generation: the ‘Xennials’ (those born between 1977 – 1983). What he did pick holes in was the definition of the ‘baby boomers’.

The statistics proved that UK baby boomers are actually much younger than their US counterparts. The US baby boom happened when the US troops came back from the war ready for more action, but it appears the UK squaddies took a few years to warm up.

The birth bonanza that followed World War two was merely a blip in the UK, with the real spurt in population growth coming between 1961 and 1972 – a group that will start to retire from 2020.

Whilst Steve isn’t so much predicting a riot, he is predicting a “tsunami hitting pensions beach” as the pensions ‘haves and have nots’ become more visible.

That’s because only half of the UK is in a company pension scheme. So as Mr and Mrs Jones retire with their company pension, their invisible wealth will suddenly become more apparent to Mr and Mrs Smith next door, who didn’t have a company pension. #Awkward. Keeping up with the Joneses just got harder.

Mr and Mrs Smith didn’t have a company pension, but did have the same house, same type of car, and the de rigueur 2.4 children. They’ve probably been working just as hard as the Joneses, too.

Here’s one of the ways Steve illustrated it:

Certainly the issue of managing your money throughout retirement – and the risk of it running out – does feel like a tsunami waiting to happen. Pension freedoms have brought all of this into sharp focus.

The old adage, coined by Roosevelt, that “with freedom comes responsibility” could not be more apt. Financial planning was always skilled, but with far more clients needing supporting well beyond their retirement date, and far more options, those responsibilities are more acute than ever.

That’s why we have launched our 7IM Retirement Planning Service to help advisers deliver income and growth to clients throughout the various life stages.

Whether clients are still working and grappling with school fees or university expenses, or whether they have hung up their heels in retirement but still have competing financial priorities with different goals and risk profiles, it’s all about trying to keep it simple.

Then there’s our free app, 7IMagine, which allows anyone (whether clients or not) to capture details about their own and their families’ finances in as little as 10 minutes.

A wealth of options can be incorporated into any scenario and include any number of streams of income, properties and other assets.

Using technology developed by the team behind Nintendo 64 classics GoldenEye and Donkey Kong, it allows investors to see how much more they would need to save each month to reach their long-term financial goals in a visual way.

It might not quite be Steve Bee ‘keep it simple’ style. But we have put our money, technology and resource where our mouth is.

It is crucial that we not only communicate better about retirement planning, and ditch the jargon – we have to have something to back it up, too.

Verona Smith is head of platform for Seven Investment Management