A recent study of the consumer's willingness to accept compulsion has raised fresh questions about the direction of long-term planning messages.
One comment sent to IFAonline on the back of L&G’s research into consumer acceptance of ‘soft’ pension compulsion suggests messages about pensions savings should be directed at employers rather than employees.
Steve Crapper, IFA at Woolhouse Douglas, says the problem is employers are still very worried they could end up with liability issues when advice is given.
”Having just read one of yesterday’s articles - Research supports 'soft' pension compulsion - I felt that I should add a comment and maybe encourage feedback from those who actually care about this issue.
”The main reason that employees of companies such as L&G, Norwich Union and others do not join their own pension scheme is because of lack of knowledge. I know this through personal experience.
”I used to be a tied adviser for NU and had to fight to get access to our employees to advise them on the general financial products available to them, and to be allowed access to things like induction courses. Eventually, this access was stopped due to it not being profitable to my area of the business - in other words having a dedicated staff adviser [at a financial services company] was not considered important.
”Since leaving NU I have tried to gain access as an IFA to other big companies, they too are scared to implement such access. The reason given is they feel if something goes wrong they do not want to be seen as sanctioning it or in some way be held to blame for the advice given, a sad fact of society today.
”What would be a better way of promoting employee participation in retirement planning would be to try and reverse this fear, perhaps by promoting the tax breaks available to the employer through the £150 tax free allowance allowed to employers to provide pensions advice, or even providing encouragement to the Government to enhance this scheme.
”Knowledge is power. If employees had the knowledge to improve their retirement planning they would have the power to do something about it. If they had a little encouragement too, well who knows where it might lead.
”If we advisers were given the chance to do the jobs we are trained for, the problem might slowly get better.”
If you have any comments you would like to add to this or any other story, email the editor or telephone 020 7968 43571.IFAonline
View from the front row
Project Libra unveiled
Including SJP and investment trusts
Spent two years at Sanlam
Will also assess FCA's actions