Corporate pension advice is too commission focused, which leads to poor retirement provision for employees and a bad deal for employers, according to Towry Law.
The firm says employers need to seek out impartial advice to ensure their employees receive good value for money pensions.
Pan Andreas, head of corporate clients at Towry Law, believes employees are losing out on retirement provision and employers are wasting money because of poor advice.
"The corporate pensions industry is still largely focused on selling pension schemes rather than providing the overall client-focused service proposition that is so desperately needed by both employers and employees," he explains.
Towry Law says small and medium-sized enterprises (SMEs) are particularly likely to suffer if they choose the wrong pensions provider for their firm.
Andreas urges employers to examine their pension schemes for hidden charges, suitable investment options, robust governance and effective communications.
"We call on directors of SMEs to ensure they receive clear and impartial corporate advice, and that their employees are effectively engaged," he adds.
"If they are not, employers are likely to be wasting their money now and will face huge problems in the future as employees understand the true value of their pension provisions."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]
Have your say:
"Pot, kettle and black springs to mind with a sermon from Pan Andreas of Towry Law on the shortcomings of commission based pensions advice. Is he aware of the competitiveness of stakeholder friendly offerings from the likes of Aegon Scottish Equitable with scores of funds which offers an effective AMC of just 0.75% on funds in excess of £50000 yet still paying commission resulting in 100% allocation of both employer and employee contributions and NO on cost to the employer? Furthermore there is remuneration included for the adviser to continue to service the plan once the employee has left a company's employment when the employer has no further interest in that individual.
I have picked up group schemes remunerated by fees as well as commission and in every case the advice component has been lacking. Successful pension advice in the workplace stems from engaging with the workforce helping them to understand the proposition and the importance it plays in retirement planning and bringing the subject matter alive. This has more to do with the quality of advice given than it has with the method of remuneration." Duncan Jones, Director, Investor First LimitedIFAonline
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