Industry Voice: Should more schemes offer their members independent financial advice?

Trustees are increasingly concerned about the standard of advice given to members, according to research from Professional Pensions and Aon

clock • 1 min read
Industry Voice: Should more schemes offer their members independent financial advice?

In the wake of the British Steel Pension Scheme scandal - which saw many members advised by unscrupulous individuals to transfer into high-cost, complex, or otherwise inappropriate pension arrangements - trustees are increasingly concerned about the standard of advice given to members around retirement or other major decision points.

Nearly two thirds of respondents to our survey - 61% - said they would like to be able to provide a larger suite of support and guidance. Almost nine in ten believe members would benefit from a greater understanding of the choices available to them.

Featuring strongly in our table of options that trustees would like to provide is access to independent financial advice or guidance. Trustees discussed several stories about members who would have potentially lost out on large sums of money owed to them at retirement because they simply did not understand their entitlements.

Covering the cost

Where the appointed IFA is educated on the scheme benefits and all of the necessary set-up work is done in advance, our experience is that the typical cost of advice is around £1,000 per member for support at retirement. Our Member Options survey showed that 68% of schemes pay for those costs on behalf of members. 

However, around one-in-five schemes pay for the set-up costs and then ask members to pay for the ongoing advice costs themselves. This option still gives members huge advantages in that they are able to approach a reputable firm that knows the scheme benefits and the costs which are negotiated by the trustees will be a fraction of the costs they would pay on the ‘high street'.

Click to access your exclusive guide and learn more about the options available to give scheme members more choice

This article was funded by AON

 

More on Pension Pooling

Joe Hathaway, Associate Partner, Aon

Industry Voice: Opportunities for small schemes

Bulk annuity market volumes have increased significantly in recent years, and there was no slowdown in this growth during 2022.

Joe Hathaway, Associate Partner, Aon
clock 28 November 2022 • 3 min read
Industry Voice: Girl power in pensions? Not yet, as women slip through AE net

Industry Voice: Girl power in pensions? Not yet, as women slip through AE net

It’s not news that women’s salaries – or pensions – lag behind men’s, but what can be done? LGIM’s latest research, gathered as UK savers face the largest price spike for decades, delves into what might help to soften the sharpest barbs of this thorny...

Stuart Murphy, Legal & General Investment Management
clock 11 October 2022 • 7 min read
Industry Voice: What do PIE and bridging options have to offer members?

Industry Voice: What do PIE and bridging options have to offer members?

Research from Professional Pensions and Aon has shown increasing traction for these offerings

Gareth Jones
clock 08 February 2022 • 1 min read
Trustpilot