Being able to adapt is one of the great things about surviving in the very long term.You can’t necessarily control everything that happens.
Our roots since 1742 have always been in Britain – which is in Europe. It’s not for us a wealth management business with 40,000 clients to tell them how they should vote.
We’re seeing a confusion between pension provision and Isas at the moment which is going to create a very complex regime for investment managers and consumer alike. The whole concept of a lifetime Isa is extremely complicated.
I would like to see the government stop taxing investment savings – particularly dividends – via the backdoor when it is trying to force more responsibility for pension provision and savings on to the individual. On one hand you’ve got a policy of trying to remove government support to encourage people to invest on their own behalf rather than rely on the state pension – and on the other, you’re removing tax benefits.
Are tax benefits better when delivered upfront or at the back end? Actually, mathematically it doesn’t really make that much difference, but as an encouragement to save it is better to have tax relief upfront.
Education levels on financial services and economics are poor generally. The core of that is a failure to introduce compulsory education in schools; and until we do, no amount of simplification of words in brochures etc is going to overcome that issue.
We have the lowest savings rate we’ve ever had and the highest level of personal debt probably ever recorded. The sooner we can help people understand how to manage their finances (and that includes savings and investments and pension provision) the better off we will all be.
We need to continue to provide better information and encourage people to seek and pay for financial advice. The kind of decision an investor needs to make is much better informed through the provision of good financial advice than anything else.
The RDR was a good thing in terms of making it clear that financial advisers were acting on behalf of a client and not a product provider. The advice gap is an obvious and sad downside.
What’s required is some form of achievable, simplified process for advisers to deliver sensible advice to those who don’t have £100,000 plus to invest. That’s where the big issue lies and I’m not sure the regulator has fully understood that yet.
Lots of advisers are waking up to the fact that somebody with £25,000 now may have £100,000 or more later on in life. But the sad economics are that the time it takes to do a fact find, suitability, capacity for loss, and all the reporting simply means they can’t afford to provide advice for those with less than £100,000.
With the new pensions freedoms, advisers face the biggest opportunity since the introduction of Peps and Isas, but there are risks. I’m sure plenty of people are making decisions that are not appropriate to their long-term pension planning.
