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Future-proofing your pension advice processes

Session   24 September 2021

In an industry that’s continually changing, keeping abreast of everything isn’t always easy. We all understand the risks associated with retirement planning – you advise clients in this space every day. But how do you get there, and what does the regulator say when it comes to your business and the processes you have in place?

With such a focus on expanding your centralised investment proposition into a centralised retirement proposition, you may be asking yourself what difference it makes and do you need to have one.  And of course, could this affect your clients and their desired outcomes.

Two of our Pension Business Development Managers, Kirsty Anderson and Andrew Nash, led this discussion, debating and challenging the key areas affecting advice firms today. They reflected on what’s happened in the last 12 months and what this could mean in the future. They asked if the regulator has even said what ‘good’ looks like for your business practices – particularly when we consider the retirement paradox.

Ultimately, everything you do as a firm flows into your advice processes – so how do you evidence client understanding and demonstrate the risks associated with investment planning?

  • The regulatory view of centralised propositions
  • What this means for client outcomes
  • How to evidence client income strategies and associated risks

Future-proofing your pension advice processes

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Write down your answers to each of the following questions and check your answers when you click through to claim your CPD certificate on the link below.

Test your knowledge

1. A key area of concern from the regulator in knowing your client relates to MIGs, this stands for:

a. A well-known fighter jet

b. Minimum income guarantees

c. Maximum information gathered

d. Material Information Gaps

2. When considering needs versus wants, the regulator wants you to consider expenditure in what categories?

a. Essential, lifestyle, discretionary

b. Need, must have, want

c. Savings, investments, tax liability

d. Current expenditures, future expenditure, unknown expenditure

3. A client’s capacity for loss is described as?

a. The client’s emotional and behavioural response  

b. The client’s ability to bear a financial loss 

c. How much risk they’re prepared to take

d. How much money they should set aside in cash

4. What is the regulator’s view on cashflow modelling tools? 

a. It is mandatory   

b. You must use a deterministic modeller 

c. It is not mandatory 

d. You must use a stochastic modeller  

5. Which of the following statements is not true? 

a. The risks of drawdown sit with the client   

b. It is the responsibility of the adviser to ensure the client understands the risks associated with drawdown 

c. Advised clients must assess the risk and demonstrate their understanding to the adviser

d. The adviser must demonstrate client understanding on the file 

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