The Pension Guidance Guarantee has raised a lot of important questions about client viewpoints, says Gill Cardy. Are advisers listening?


Whenever I see a report flagged up as ‘consumer research’, I sit up and pay attention.  Too much research in our world is conducted by financial institutions and published among existing users, -whether they be users of products or advice services. It’s rarely informative or thought-leading.


Many years ago, Aegon undertook some detailed consumer research into the types of adviser interaction that consumers wanted, and it came up with ideas such as the drop-in centre, the supermarket, personal shoppers, personal trainers, and gurus.  And at the time, those conclusions were in general ridiculed by the financial services professionals – who, of course, always know exactly what our consumers want.

(Or not. )

Client Opinions Still Count

Nowadays I look back and contemplate how many advice firms are now modelled on the concept of personal trainers or gurus, with the ad hoc and transactional drop-in centre models very much out of favour, especially in a fee-charging world.  But maybe the concept of the personal shopper could still work in a world where – however much information consumers can find from other sources – they still need someone to help them with the final purchase decision? (Including the decision not to buy, if your bum really does look too big in that particular pension).


Consumer reaction to the new disclosure documentation was one of the most useful pieces of regulatory research I have seen in a long time. And any adviser worth his salt should take on board these valuable lessons from the public on how to interact with the client public – taking on board the lessons from communications experts (not from the FCA!) on how best to ensure that consumers hear and act on our messages.

Similarly, research by NMG and published by the CII on consumer reaction to the Guidance Guarantee should be read and digested by all advisers.

Coincidentally, a discussion on adviser directory sites indicated that around half of those listed on one site said they had no minimum investment value for new clients.  Which means that, for around half the Independent adviser community, the Guidance Guarantee’s target research audience (i.e. people within 5 years of retirement and with pension pots of up to £100,000) has something very useful to tell us.


But even if this is not your own firm’s niche market, these people still have opinions and attitudes which will not be so wildly different from their more well-heeled neighbours, with whom they will no doubt discuss their options.

Personalising the Service

Consumers want a personalised service, even if the output is generic information rather than regulated advice.  Consumers want to receive relevant information, not just a huge list of largely irrelevant options.

Consumers also want face-to-face delivery of the service.  That’s not unexpected, considering the age group that was consulted, but we can’t assume that online or telephone based services won’t become more popular in the future among a more digitally-comfortable generation.


Over 90% of those asked said they would use Guidance Guarantee services if they could be satisfied that those delivering it were impartial and qualified. Which is good news for advisers and for The Pensions Advisory Service.  Around one quarter indicated that they would seek professional advice as a follow-up to the Guidance Guarantee information they received. But will they pay for advice if they can get free guidance?

Of course, it’s a somewhat negative approach to the whole question of getting advice, and one which the MoneyBox’s eminent Paul Lewis failed to pick up on in his investigation into adviser directories, which is that one of the biggest reasons why consumers should consider seeking professional advice and paying the relevant costs and charges associated with that advice is that regulated advice provides incredibly valuable investor protections if things go wrong.

Don’t Make Snap Assumptions

Now, if we bring together the number of advisers – which has apparently been falling although we still find it unconscionably difficult to work out by exactly how much? – with the number of advisers who want to help consumers with less than £100,000 to invest, we can deduce that there are going to be a lot of consumers who can’t find advice.


But if you’re inclined, even during these darkest winter nights, to look on the bright side of life, you could also deduce that things are likely to be looking up for those adviser firms who find a way to advise these clients efficiently and profitably.

By the way, let’s not forget, before we get too sniffy about minimum investment limits, niche markets and target audiences, that just because someone “only” has a pension pot with a value of less than £100,000, it should follow that this person has no other wealth. Or that they wouldn’t be prepared to pay you fees for your advice.

Many employees work post-retirement because they want to, and many of them do so because they can afford to.  Post-retirement employment does not always correlate with pensioner poverty.  Many people have varied and additional financial resources.  We are entering into a world where making assumptions based on single numbers or individual investor characteristics is an increasingly dangerous occupation.  And the winning advisers will be those with the broadest minds.


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