8th July 2013

Prudential: What’s driving your pensions advice …?

Making choices about product providers for your pension clients has been greatly simplified by best advice systems, but is your approach providing you with the right answers?

The old saying of garbage in garbage out can be applied to any systems which require manual intervention to deliver results. So are you making sure that your input delivers what you need to provide advice for your clients? 

Don’t let default take control

Many best advice tools have default settings which mean the output will be based on these default settings unless you tailor your request for each client. Default options will rarely reflect the client needs.

Your client’s needs are at the heart of pensions advice and cost may be a core consideration, but don’t short circuit the selection process and base product choices using default settings alone.

Get the system working for you

As part of your fact find, you will have assessed and identified your client’s retirement planning needs now and in the future as well as their attitude to risk and capacity for loss. So these requirements should be reflected in the best advice system output.

So the selection criteria should reflect the specific recommendation for each client:

• Use reduction in yield rather than AMC – to provide a more complete comparison of all the costs which a client will incur.

FSA Report – Quality of advice on pension switching – December 2008

• Include the adviser charge basis which you have agreed with your client
• Make sure that any requirements are included in the selection criteria for product features now or in the near future e.g. SIPP, Income Drawdown etc.
• Fund recommendation - the fund selection should reflect the recommended fund choices.

FSA Report – Quality of advice on pension switching – December 2008

Supporting your advice and services

In the climate of continued regulation and monitoring, a selection report on file which accurately reflects the advice being provided will support your product selection and provide a stronger backbone for your advice.

Default can be a dirty word

Best advice tools can save you time, and choosing selection criteria to match the client needs can provide valuable output to support your product recommendations - but a default approach is of limited value to you or your client.

Make a best advice system your ally by making sure it reflects your client recommendations – helping you to deliver value and service to your clients.

For more information, please contact your Prudential Account Manager or look at Prudential’s retirement planning solutions at http://www.pruadviser.co.uk/content/personalpensions/

Pensions