Back in 2016 the Financial Conduct Authority (FCA) in the UK launched a review of the the life and pension sector’s closed-book business which revealed how they were exploiting their longest-serving customers. The review highlighted a number of failings including holding customers to unfair and outdated terms and conditions written decades previously, companies failing to communicate clearly at key points during the policy term and hidden charges that were in excess of investment returns. It also criticised punitive exit penalties on pension products which left investors tied in to poorly performing products. In December that year the regulator published guidelines which provided firms with detailed information on the actions they should be taking in order to treat their closed-book customers fairly.
One of the guidelines issued by the FCA was that closed-book customers should be able to move from products that are no longer meeting their needs in a fair and reasonable manner. You probably don’t need me to point out that poorly performing investments could put the comfortable and serene retirement of diligent savers in jeopardy, yet three years after the guidelines came out, I still see new clients, and not just from the UK, who have their savings tied up in these types of products.
Perhaps you are one of them? Or perhaps you have pensions which have been neglected over the years or other investments languishing unloved and underperforming? You may even have lost a pension entirely. While that may sound ridiculous, the Department of Work and Pensions estimate that there are over £400mn of unclaimed pensions in the UK and that, with the average person now working their way through eleven jobs over the course of a lifetime, 80% of us will lose track of a pension at some point in our lives. Add to that recently introduced pension freedoms which give individuals more choice over where and how to save and when they can access their money and it’s easy to see how investments might slip through the net.
Any financial adviser worth their salt should go through the financial affairs of a new client with a fine-toothed comb to ensure that they have a comprehensive overview of their situation and should keep track of all assets for the duration of the relationship. While needless tinkering is a bad idea, it is essential to review the portfolio from time to time in order to flag elements which are not pulling their weight and ditch products that are no longer meeting their needs. If your financial adviser is not performing regular reviews then your investments are probably not being managed correctly and it might be time to switch adviser.
If you are worried that some of your assets might be losing value or if you have a number of pensions dotted about which might be better consolidated into one, why not book an appointment with me to chat through your financial planning goals and whether you are on track to achieving them? Together we can get your assets working as hard for you as they possibly can to guarantee you the retirement that you deserve. Please feel free to get in touch by email at firstname.lastname@example.org.
I have decades of experience in the financial services industry in South Africa. I worked for Discovery, the country’s largest insurer, for 16 years as a Specialist Consultant/Franchise Director, heading up many of their franchises, before moving to Regal, a leading financial advisory firm.
I decided to relocate and join Infinity in Ho Chi Minh City which would give myself offshore experience in the industry and satisfy my craving to explore a different culture.