Guidance is the start and let’s hope that advisers position themselves so that advice is the natural conclusion
Chris Prior was formerly manager, sales and distribution at Bridgewater Equity Release
So, April the 6th came and went – there was no noticeable earthquake or other ‘acts of God’ to signal that everything had changed, but so far as the pensions industry and the wider later life market were concerned, everything did.
Guidance was born, kicking and screaming into the world, with (I suspect) providers and advisers looking on anxiously and bracing themselves for what seen, and unforeseen, consequences it might bring.
We are just a couple of weeks into the new regime but there are some notable mentions to be made, and perhaps some quick lessons to be learnt for all stakeholders.
Firstly, hindsight is a wonderful thing but perhaps in future the powers that be might not launch a major new consumer service in the month prior to a General Election. The reason being that, with regards to Pension Wise, it can only be promoted through digital and print advertising during April and May – even here an exception has been made because normally Government Schemes are not allowed to be advertised at all in the weeks leading up to an Election.
Therefore, the planned television adverts, which would be far-reaching and signal to retirees where they can secure Guidance from, have had to be temporarily scrapped and, judging by anecdotal evidence about Guidance take-up, it has (so far) not been what many had anticipated.
Indeed, it would appear that most retirees are looking to their providers for initial ‘guidance’ and information on their pension situation, with many institutions reporting huge numbers of inbound calls and contact from their pension customers.
I suspect as well that financial advisers have also been inundated with calls and requests for information and one can probably assume that those individuals who have always had advice will simply return to their adviser and probably bypass Guidance all together.
That being said, Guidance – while available to those who already use advisers – was not really established for them; instead it was primarily for those who have probably never seen an adviser in their lives before and therefore it seems rather unfortunate that large swathes of the Guidance ‘marketing’, which would have told them where to go and what to do, has been switched off during this time.
The other point about Guidance which has been debated is around what it does and doesn’t contain.
It is of course a very broad-brush look at an individual’s options and you would therefore think there would be consistency between the various organisations ‘dishing out’ Guidance.
However, at our recent ‘around the table’ event, it was pointed out that these organisations – The Pensions Advisory Service, Citizen’s Advice, etc – might well be providing different Guidance and there might not be a consistency of content.
In other words, those receiving Guidance face-to-face could be getting different information to those choosing to speak on the phone.
These concerns about take-up, accessibility, information and content only add further uncertainty to the overall delivery of Guidance.
Part of the response to any criticism might come in the form of, ‘Well it’s very early days’, however given the importance placed upon it by the Government, and the life-changing potential for those reaching retirement, it does seem worrying that individuals are likely to be having a very different experience of a service which should be pretty uniform in both content and delivery.
That said, I’m still of the opinion that Guidance is far better than ‘no Guidance’ and that if it moves individuals some way towards financial advice, rather than leaving them to their own devices, then it is still a positive in the marketplace.
I’m in danger of repeating myself here but advisers have a very real opportunity in this new environment to take individuals from Guidance into advice, perhaps through an initial ‘staging post’-type advice experience and then onto the full service if required.
Equity release advisers who are able to add strings to their bow, or who can link up with financial advisers that offer a more holistic service, could certainly benefit from the new environment.
For all the talk about cashing in the pension and the opportunities it offers, I believe that the need for equity release products is only likely to grow.
Gaining access to the growing number of clients for whom equity release may be suitable should be a marketing and business priority for all specialists.
The market is certainly opening up and growth is likely, however the specialists will still need to access the clients – setting up a system and process for doing this should help develop the business opportunity that clearly exists here.
Guidance is the start and let’s hope that advisers position themselves so that advice is the natural conclusion.
