CORPIAS NEWSLETTER

Pensions News Bulletin September 2014

Autumn already (Q4 for the investment fraternity)

Finishing your plans for November and December is a bonus. With the end of the year in sight it’s time to check progress. How is the proposition and structure you planned for 2014 taking shape? What is the actual progress against forecast? When is the plan for 2015 starting? It makes sense to turn to that now even as 2014 plans develop.

There is a lot of wasted time and missed opportunity in business, but it’s never, ever, too late to start doing things better. Time lost is never recaptured. Did we make the most of what we had?

Prepare for the year ahead while you complete the current year. Taking stock and being decisive about each stream of the business plans makes sense. If you think ahead, you can treat December as the almost lost month it usually is, where any commercial successes can be treated as a true bonus, and where if the teams are relaxed because they got ahead of the game, they will achieve more than the usual pre-holiday rushed activity usually gets.

No excuse for “sorry I can’t advise you”

Readers of our previous newsletters will know we believe that in corporate pensions there are very few occasions where regulated advice is particularly useful for employees, and that pensions and HR professionals who are confident in workplace pensions should be comfortable advising their members, instead of hiding behind the excuse of “sorry I can’t help you because I can’t give advice”.

That happens a great deal and is an important factor in many of the bad decisions we’ve seen in the workplace pensions’ field over the years. From pensions mis-selling to not explaining the advantages of paying more contributions, or even refusing to explain the relative merits and demerits of various fund choices in normal everyday language. The result is that employees don’t engage, do the wrong thing, and don’t value the pension scheme or utilise it fully.

Well, the FCA have made it very clear and I quote them here:

“For advice to be regulated at all, it must relate to a specific investment and must be given to the person in their capacity as an investor or potential investor, or in their capacity as agent for an investor or potential investor, and relate to the merits of them buying, selling, subscribing for or underwriting (or exercising rights to acquire, dispose of or underwrite) the investment. If it does not have all of these characteristics then it is generic advice and is not regulated. For example:

• Advice to a customer to buy shares in ABC plc or to sell Treasury 10% 2014 stock is advice about a specific investment and so is regulated.
• Advice to buy shares in the oil sector or shares with exposure to a particular country is generic advice because it does not relate to a specific investment.
• Advice on whether to buy shares rather than debt is generic advice and is not regulated.
• General advice about financial planning is generic advice and is not regulated.
• Guiding someone through a decision tree where they make their own decision, would not normally be advising on investments.

The full paper can be found here:

GC14/3 Retail investment advice: Clarifying the boundaries and exploring the barriers to market development.

Employers and industry pleased with Pension Regulator

New research published on The Pensions Regulator’s website shows it continues to receive positive feedback from its key stakeholders and industry dependants for the second year running.

The tenth annual Perceptions Tracker report, which reflects how the pensions industry rates the regulator on how well it carries out its statutory objectives, found that seven in ten (69%) believe its performance over the last twelve months has been ‘very good’ or ‘good’.

This is similar to last year’s result, and significantly higher than the previous two years’ surveys.

For the first time, survey respondents were asked about their awareness of pension scams, with 31% of those aware saying their opinion of the regulator is more positive in respect of its actions in combating such activities over the past year.

Key findings include:

Interim chief executive at The Pensions Regulator, Stephen Soper, said:

I am encouraged by the tracker report which notes that the pensions industry continues to rate us highly at a time of significant change in the landscape.

We’re aware that one of our biggest challenges lies ahead with the automatic enrolment process, as tens of thousands of employers reach their staging date in the next few months, and we are committed to engaging effectively with those who most need to hear our messages.

I am therefore pleased that 77% of employers believe we are effective in maximising compliance with their AE duties.

CORPIAS says congratulations and wishes them well.

Thank you for reading.