Opinion  

Thirty-two years is a long time in pensions

Martin Tilley

Martin Tilley

When I look back at my 32 years in self invested pensions, it is hard to imagine how much has changed over the course of my career.

We have seen the introduction of pension freedoms, increased regulation and now have a solid professional standing and much of this has been down to education of the industry and consumers.

This education was focused on the older generations at retirement but is now more focused on the younger generations, aiming to engage with them and encourage long-term savings, both within and outside of a pension wrapper.

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Back in the late 1980s, many of those distributing pension products were simply salesmen looking to earn commission from sales.

They could in effect become qualified overnight, with very little formal qualifications.

They were very transactional in their approach and it is only more recently, say the last 15 years or so, that we have seen a huge change in the sector. Much of this change was driven by RDR and was very positive for the sector. 

Advisers now offer a more holistic approach to advising on clients’ affairs.

Perhaps the biggest change has been in the intermediary sector where the salesman of yesteryear has been superseded by a highly qualified and professional sector providing a “valued added” service, charged for through fees and not commission.

These advisers want to be part of the sector, they care about their clients and have to be fully qualified to give advice and maintain their professional development, or lose their qualifications. 

Technology has also moved on in leaps and bounds. While this has largely aided the efficiency of administration it has also had an impact on education and information for consumers.

The majority of pension providers and advisers have sections on their website that provides unbiased information and education for advisers and consumers.

This consumer engagement is so important but it can also lead to potential detriment through the information that is available. 

Knowledge can be a powerful tool, but not all of the information available on the Internet is produced for the sole benefit of the reader. We unfortunately see unregulated advisers and scammers using the Internet to sell to consumers.

The rise of this pension liberation, using these schemes, has yet to be fully eradicated and whilst this continues both the consumer and the Inland Revenue’s coffers remain at risk and benefit the promoters of such schemes.

Similarly, not all of the “investments” promoted are as they seem and the Internet allows not only the sophisticated investor to find these “opportunities” but also unaware consumers who can see their life savings wiped out. 

The next 32 years will see even more change in financial services and the pensions sector. People are becoming more aware of the need to take control of their finances and to plan ahead.