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Workplace advice

Better Retirement to fill workplace advice gap with new retirement advice solution

Converting a pension pot into cash and income is one of the most difficult financial decisions many people will ever make.

If people with workplace pensions get good advice they will make the right choices when they reach retirment age and will be able to look forward to a financially secure retirement with peace of mind and security.

However, if they don’t take financial advice they run the risk of making some serious mistakes which could result in a less financially secure retirment with lots of worry and anxiety.

Unfortunately, it can be difficult for those with workplace pensions to get the financial advice they need especially for those who fall into the advice gap.

There is gap between those with relatively small pension pots who can get good outcomes without advice and higher net worth clients where the advantages of advice are obvious.

This means that there are many people who may not be millionaires but have sufficiently large pensions and investments to benefit from financial advice.

My colleagues and I at Better Retirment have been advising individual clients on all aspects of annuities and pension drawdown for over 25 years and now we are making our expert and specialist advice available to those with workplace pensions, especially those who might be in danger of falling into the advice gap.

Workplace pensions – good during accumulation period but not so good at retirement

Most workplace pensions are well run during the accumulation stage. The administration is efficient, member communications are clear and informative and the default investment funds are well managed.

This means that people can build up a decent workplace pension without making any major decisions by choosing the default options so they can get by without engaging with a financial adviser.

But what about the retirement stage when there are no longer any default options? This is the time when the support framework within a workplace pension stops and people are left to make their own decisions.

Choosing the most appropriate retirement options will be one the most important decisions many people will have to make. If they get it right they can look forward to a financially secure retirement. But get it wrong and they could end up with a lower standard of living than they expected.

The only way to make sure that the right decisions are made at retirement is to get financial advice but many members of workplace pensions don’t get the advice they need because the structures are not in place to access suitable advice.

Pension freedoms

Pension freedoms can be a mixed blessing as there are disadvantages as well as advantages. The main advantage is people are free to choose exactly how they want to take their pension whether as a cash lump sum, annuity or pension drawdown.

The disadvantage is there is no safety net and people run the risk of having a financially insecure retirement with lots of worry and anxiety if the wrong decisions are made.

Help and guidance

In their defence, many workplace pensions will try and help their members make good decisions by giving information on retirement options, providing tools and resources and signposting people to guidance from Pension Wise.

But this is not enough to ensure people make the right choices and get the best outcomes.

Education and guidance are not enough because the decision whether to arrange an annuity or invest in pension drawdown is on the most difficult in personal finance and it is simply too difficult for most people to make the right decisions without specialised advice.

Advice is important

There are many reasons why it is important to get good retirement advice including:

  • There is a lot at stake so people shouldn't gamble with their retirement income
  • It is a serious business - guidance or no-advice is not enough
  • It’s more complex that it seems and it easy to make mistakes
  • It’s difficult to make the right investment decisions
  • People can’t always trust their own instincts

Help and advice is at hand but there is a lot of confusion and misunderstanding about the different types of help and advice available.

Where to get help

The type of help and advice people need depends on what they want to do and the complexity of their circumstances:

  • If people simply want information about their options, they can start by talking to their pension department or pension provider.
  • If they want generic information about their options without the need for a specific recommendation or advise they can take advantage of a guidance session with Pension Wise
  • But if they want to know which options are most suitable for their circumstances or an in-depth review of their pension arrangements, they should contact a financial adviser.

The help and guidance may be top quality but in many cases it does not give people what they really want. In my experience, most people want someone to tell them what the best solution for their circumstances is or to get a second opinion on the solution they think is intuitively right for them. In both cases it is important that all the key issues and options are explained because people don’t know what they don’t know.

The elephants in the room

There is no doubting that financial advice is the only way to ensure people make the best decisions but the elephants in the room are costs, complexity and trust.

The most common perceived barrier to advice is the cost and complexity and I have argued for a long time that advice does not have to be expensive and complicated and can show examples where the commissions for self-select options with no advice are more expensive than regulated advice.

The advice gap

This has resulted in an ‘advice gap’ where many people with average sized pension pots or modest financial wealth feel excluded from financial advice.

Advice for workplace pensions

Our new workplace pension proposition

Better Retirement has been advising clients on all aspects of pensions for over 25 years and we are not making our unique advice proposition available to those with workplace pensions.

We offer a range of service including;

  • Retirement planning advice
  • Annuity broking
  • Pension drawdown advice

By combining technology with expert knowledge, we can provide complex advice to higher net worth clients, focused retirement advice to those with above average sized pension pots and cost-effective solutions to those with smaller pension pots.

Download our Guide to Workplace Advice

William Burrows

Offices in London, Northampton and Cardiff

Call: 07730 435 657

 

William Burrows / Retirement Intelligence Ltd
International House
24 Holborn Viaduct
London
EC1A 2BN
Better Retirement
400 Pavilion Drive
Northampton
NN4 7PA 

If you need help or advice - Contact us

As one of the most respected specialist retirement advisers, William Burrows and Better Retirement will be pleased to help you make the right decisions at any stage of your retirement journey.

Call or email now for a free and without commitment chat.

This website is run by William Burrows and publishes generic information on annuities, drawdown and other related retirement income matters. Any information you use is at your own risk and does not constitute financial advice.

If you require financial advice you will be advised by Better Retirement where William Burrows is authorised to give investment advice. Better Retirement Group Ltd is authorised and regulated by the Financial Conduct Authority, reference number 153420.