Future of Retirement Income Masterclass hosted by Baroness Ros Altmann | October 2020
- 57 mins 54 secs
Baroness Ros Altmann hosts a panel discussion on the Future of Retirement Income. On the panel are:
- Alistair McQueen, Head of Savings and Retirement, Aviva
- Andrew Tully, Technical Director, Canada Life
- Kirsty Anderson, Business Development Manager, Prudential
- How advisers can best help their clients through the COVID pandemic
- The dangers of taking an unsustainable amount of income from a pension fund
- The importance of using Isas as part of an overall retirement strategy
ChannelCPD Top Up
Automatically generated using Asset TV AI and Amazon Web Services.
It may contain errors and omissions.
Yeah. Hello, everyone. Welcome to this asset TV masterclass. In a world of turmoil, people are unsure what's going on on, but they may well want to turn to advise us for help. So how can advisors make the most of the opportunities presented by the pandemic? What does the current crisis mean for pensions, for investments, for interest rates, for tax policy? Government has protected pensions so far. Is that likely to continue to discuss these and other issues? Let's meet our three expert Panelists today. First, we have Andrew Tully, technical director off Canada Life. Next, we have Kirsty Anderson, business development director of Prudential. Last but not least, Alister McQueen, head of savings and retirement at Aviva and welcome to everybody. So shall we kick off with the big question that everybody is probably asking, which is how can advisors best help their clients through the uncertainties of the current pandemic? Maybe if I could turn to you first. Alistair. What? What would you say to advises on that subject? Yeah, right. Massive question. Massive period of uncertainty. I think the early evidence that Aviva has seen since the arrival of pandemic has been one of relatively good news when it comes to pensions behavior on, we've seen the adviser community step forward. The three messages that we've been given to the public is Keep calm. Remember the long term on seek help? We've seen all those behaviors kick in. We haven't seen a systemic withdrawal of money. We haven't seen systemic cancelation of pension savings on. We have seen people seeking help both from Aviva on from the adviser community. And this is really a chance and a time for the provider community and the advisers community to prove their worth, like arguably never before. And I would identify one demographic in particular that we must not look past. I think the government has a very challenging agenda. I can understand why the economic agenda will be arguably biased towards the youngest in society, getting them into the jobs market, supporting them on the health agenda. We focused on the oldest in society for obvious reasons. There are million's in between million's who are maybe approaching the year of retirement, transitioning from work into retirement, and this is a demographic that is already one of the most stressed in society. It's a sandwich generation, and so That's a demographic that while the government may be prioritizing those other age groups, we in the private sector must now step forward to ensure that that that middle group that 50 million people between the ages of 45 60 have the support and will be judged on how we can step forward to help them Now Alice defects a very interesting point, Kirsty. What would you say in response to what Alistair has said and also to the general question about how advisors can best help their clients through the pandemic? Yeah, so I completely agree with what Alistair has just said. And I think, Well, I would add to that. My concern is that the age group that are going to be most affected are absolutely sandwiched between different priorities on from some of the research that's been done. An addition to that kind of demographic. Actually, a lot more women are gonna be affected the meals as well. So I do think that you know providers on government and perhaps some policy that comes in place in the future. E. I do think that needs to be taken into account so completely agree with what else there has said. But I do also think that advisors have adapted very well to the pandemic. I mean, the majority of advisors that we've spoken Thio have managed Thio transition, transition, their business to be ableto work and from home, like most of us and most advisors that I've spoken to have been very engaged with the client reviews bringing them forward. And I haven't come across many advisers who have been in a situation where ah, lot off their clients have been negatively affected. And I think that's really positive about the advice community. The you know, they have done their job properly. They have gone through plans. Lots of clients that seek advice have got different tax shoppers, so they've been able to rely on different things. So in the main, I think advise clients probably are going to be a non okay situation. I'm perhaps a little bit more concerned about the non advise clients, and in the future, how many more of us might be affected by furlough and job losses and perhaps might dip into our pensions sooner than Andrew Can I just bring you in? Uh, now you've been waiting very patiently uh, what what's your reaction? And what's your best advice for? How advisors can help their clients at the moment. Okay, but I guess the echo, first of all, what I lost during custody say we've seen very sensible behavior. No, no major changes to two people withdrawing money or changes to investment strategies that some people seem to be keeping calm and carrying on quite sensibly. Uh, so it's a key, I guess is probably looking forward over the next six months or next year. And that's probably the biggest challenge is going to arise as a people have got through this initial period. But we're going to see people coming off for low now, so that's gonna put more pressure on on the income moving forward. We might see more redundancies and things like that, so it will be no surprise of people. Do it. Take pauses in in contributions to pensions and things like that. So So I think one of the keys is is to try and minimize got gaps so it sort of people do take a gap for any period of time. It's to try and start up as quickly as possible. Gary After so So So because the danger, I guess, report enrollment when people step out. That might step out of savings for three years. So I think it's trying to encourage people get, uh, if there is a good reason for them stopping and on there will be pressure on finances is that they start saving as quickly as possible. Going forward. Yeah, Alistair, we wanted to come in on that. Yeah, I think massive change in the classic line has changed. Brings challenge, but also opportunity. And the winning businesses, whether you're an adviser or a provider or any organization, is the one that can adapt to this new way of being like us today. The four of us would normally be in a studio. We're now talking to each other from a respective homes advisers. We recognize our relation a relationship business, and many of those relationships would have been built through face to face contact with the respective clients. That is not possible. The winning advisers will be the one that can use technology to build new relationships with new clients, and my own organization have gone from a situation where in virtually three weeks we went from having 17,000 people in offices to 17,000 people from working from respected homes. So the challenge is huge. But challenge will bring winners, and those who can see the opportunities embraced the technology build relationship. Using there's a weird medium will be the ones that can can really thrive through the challenging time. And, of course, the relationship also depends on the quality off the input. So in terms of reassuring clients or helping clients understand how best to invest in the moment, the risks of taking money out of their pensions too soon, maybe the issue of sequencing risk if those people are coming up to retirement, those are all areas that advisors could have significant input, I think. What what what about you, Kirstie? What would you think on those areas for advisors? Yeah, I can't agree with you more roles. And I think the industry as a whole, you know, post freedom and choice. We've always had quite a big focus, and we've spoken to advisers and at length about how important sequence of the term Vasquez and capacity for loss. And I think what this has demonstrated is the fact that it is very very important because what was perhaps quite theoretical for a lot of clients prior to this has now become quite riel s. So I do think and I think in the main advisers have really stood up to the challenge and taken that on board. On most advice, farms have already incorporated cash flow mode blank and things like that into the process anyway. And I think mortar starting to think about It's not just, you know, sequence and risk for clients in retirement taking an income. Actually, it started to get really important for clients. Is the approach retirement? And again, you know, if you think there might be clients in situations that were planned to retire now on, if they've had quite a big hit on their fund because perhaps that wasn't taken into account, perhaps their plans are going to change. So I think in the main client advisers have already started to incorporate it. And if anything, they're probably just started to think about, you know, watch trace taste. Should we be doing to ensure clients really do understand how important that says on? If they don't want to take that risk, then perhaps they should be thinking about the alternatives again. Yeah, Andrew and Alice, do you both? Bean nodding along with Curse Do Do you have anything to add there, Andrew, I think. Yeah, so it's so absolutely group for because they said so I think this year was was probably a classic example. What was so big market decreases in March and and it would've been easier to have a knee jerk reaction and come out mark. At that point on, it's shown that people stayed in the market, actually markets of bounds back to where go where on DSO people just left alone on. But we're comfortable doing that, as most advisors with tell their clients to dio going now back in the same situation. So it's like the worst thing to do would have bean thio almost kind of panic and come out the market at at that point. And that's and that's a great assistance. And having an advisor, I understand. Yeah, I think experiences like this are hugely educational for clients and others, an industry we have all learned hugely the power of diversification in the last six months, I think many clients will read headlines and say, Look the footsie has fallen 20%. Surely my pension fund has fallen 20%. Most clients will be looking at the pension fund and, thankfully, not seen the fall of 20%. Many may have seen their fund values hold built on the foundation of diversification that either they have chosen to put in place themselves other advisers have put in place for them on DSO. These fundamental things we've talked about for many years have been tested like never before. Andi, in many cases, have been proven to be the right strategies. So So it's a time to demonstrate the value for both the provider sector on the adviser set. And I think that is reassuring evidence that they are stepping up to the plate. How do you think advisors can help their clients understand? Maura, about the hand holding that advisors conduce Oh, and the temptations that those who don't have advisors may have being lured into, you know, Thio to sell the market at the bottom and then wait a while and then maybe be tempted to buy back when it's already recovered 20% or so. Do you think advises make enough of their skills in helping avoid bad decisions as well as making good decisions. I think that's one of the head and aspects of advice, isn't it? And that there's a great focus placed on what advisers and doing. But quite often it z telling people not to take action. That's gets a huge skill. Get good advisor brings s. Or perhaps they don't do that. Also, perhaps clients will understand what what advisers have shown them in the past. So things like cash flow modeling showing what happens if markets fall on how that can recover, go after. And clients might not necessarily have understood why. And advisers showing them got you know what, your and your review. And now that, uh, the fact that advisers planned, forgot and planned how to cook We've got one will know, make sense to clients. Yeah, I mean, it also is important not just for those who who clients who've already got advisers, but to use this as an opportunity to attract new clients who might not have had the benefit of advice. Alice, do you nto? That's exactly the point. I think you've touched on Rose, I think, for the 9% of the population that do regularly access financial advice. They have got great support of their side. I'm thinking of the 91% that don't have the access or the affordability to bring that skill set on board. This last six months has been a huge positive advert for the value of advice on DSO for the ninth. Some of the 91% me thinks you know what There's a really good investment is bringing on board that help. But also we need to make sure that for the 91% are some of those that can't Ford advice, we can provide support and guidance for that population as well. Um, some people are flying blind towards retirement, and some are flying solo towards the time, and that's a dangerous combination. Well, what the government is trying to do at the moment and we've got some amendments in through the House of Laws and is working with cross party groups is to help clients get more out of pension wise. You know, the free guidance service that's meant to help you understand Maura about pensions. It's only for the over fifties, but of course, that is where the crucial ability to think about taking money out of your pension would most likely start Andi, so far, pension wise has no received the sort of take up that you might want on once people have been to pension wise. The idea is that they might then understand the value of of advice. Do you think that advisors are fearful of pension wise as a competitors? Or do you think that they can benefit from being the next step? Once you understand how complicated things are with guidance and you want someone to help you make the right decision, I think it's interesting. I think you know, when pension wise was first put in place, advisers perhaps weren't I should have it. I do not get the information out. All the advisers are concerned or threatened by pension wise. In fact, I think that it could work very well in tandem together. Yeah, I personally think Yeah, yeah, I think what perhaps is missing is the fact that you know the clients not know about it or I do not reading information. Is it not promoted well enough? Because Alistair is repeatedly referred to 9% off, you know, consumers access and advice that actually, with 674,000 new policies that went into some type of retirement plan in the last 12 months, 36% actually regulated advice. So it's a little bit higher specifically for the retirement income market. But nonetheless, that is a significantly large proportion of individuals who aren't seeking advice on and again from the same data that that was published by the F. C. A. I think the average rate of income withdrawal is 8% now. I don't know any advisor that would advise their client to take it. Person. I've certainly never spoken to them. On average, it's probably about half of that. So that would indicate to me that a large proportion of clients not seeking advice or guidance are therefore probably taken mawr than a sustainable within their funds. So I do think we absolutely is an industry need to do something about that and get a bit more join up with pension wise to do. Not only are they likely to run out of money sooner on pay more tax, but they've also given up the opportunity of investment returns to grow their fund later, too, so There's certainly an education role here, which is broader than financial advisors. And the government, I think, needs to doom. Or but talking of advice, what about the issue of DB transfers? I mean, that's been a hot topic for quite some time. Uh, people are supposed, unless it's less than 30,000 to get financial advice. But do you feel that that's an issue that advises can engage with now or a really running away from? I would certainly hope, because it's a difficult market. It's definitely difficult market for advisors, but there's also a huge needed. So it's a non immensely complex area. People need help, and I was just saying people above articles and need to take advice. But But even if they didn't, it's absolutely a crucial area. Thio get help because it is so complicated. Good difficulty for advisors is cost, so so P I costs have been going up. Greg Yah. Later changes have been constant over the last few years, but nonetheless there is a good market because people who want help who need help in considering whether transfers right or not, uh, on that it could include existing clients, so it's not always just about new clients and helping new clients. It will be some of advisers, existing client bank. So so? So I think it would be disappointing for lots of advisors toe walk away from the market. I not understand there's no uneasy market, but but because people do therefore, I need help, understand? Yeah, I think there is a definite market there. I think everybody watching will understand the potential arguments in favor of a DB transfer the flexibility the inheritance benefits, the potentially the lifetime value benefits of transferring. So there's a definite market over. I think, in honesty. It's been helpful for the FDA to not quite put it in writing, but send the message that a DB transfer, I think is no guilty until proven innocent. There was a period of confusion for a while that yes, it's neutral. But I think they said a message. It's guilty until proven innocent, and I think everybody, whether you're a provider or an adviser, approaches it in that way. And I think that's in the best interest of the client. Yeah, in part of what's driven all of this, of course, is the exceptionally low interest rates, which have boosted the actual transfer values. And that's another challenge for both advisors and clients. You know what? What do you think advisors can suggest to clients investment wise when interest rates are record loans, possibly going into negative rates? And how will that affect investments? Will that drive more diversification? Does that mean you shouldn't have so much in bonds? Maybe if there's more risk there, Is there less risk? You know, I think investment portfolios in the current environment a trickier than ever, aren't they? With the stance of monetary policy and who knows what's coming next? Custody? Yeah, I think there isn't really a one size fits all answer to this, is there? It's, you know, very challenging times. We've definitely bean on an environment where we've seen lower levels of growth for a longer period of time and that does not look set to change at all. So, you know, I would just echo what I'll started, I think Andrew said before, as well, I think most advisors I am definitely do go for diversification, negative correlation or the other, you know, terminal do that comes into play here and it really is just about helping the client to understand that is about longer term investment and try not to be a short sighted and again IQ. When what we said earlier on, I think those clients that perhaps pilled money or are dead on investments, which out probably are going to be perhaps regretting that now. And I think just alongside the db point that you made there, though, I think it's quite a difficult time right now because I agree with what both Andrew and Alistair said. Obviously, you know, DB benefits are the highest value, But there will be some clients in a situation now where perhaps they are going to be major London. They are going to be put on furlough. They've got access to no other funds. There might be situations where, because of interest rates there, see TVs are higher than ever. For some clients. It's gonna be really difficult to understand why they can't seek advice, because from what I've seen, a lot of advisers have backed off from that market because off all the regulated the complications that complications perhaps isn't a right word, but it is. It's difficult for a business, isn't it? Yeah, I've seen I've seen the same thing, and I still I agree. You know, I think for people who have got a few different DB pensions and one or two deferred pots, which they're not going to give them much pension, that they could be quite a few tens of thousands of pounds worth off d. B. To suggest that for them, it's not suitable to transfer. I find rather difficult, especially if interest rates are these exceptional levels. You're nodding there, Alistair. What? Yeah, well, I think we were talking about interest rates. Let's remind ourselves that this is not something that's just arrived in the last six months. I think for a decade, plus, we've been navigating exceptionally low interest rates. I was It was incredible to learn for me that 2000 and eight was the first time ever that base rates have been below 2% in the 300 plus year history of the Bank of England on would be navigating that for 10 plus years now. So we've got experience on our side. I think it reminds me that the transitioning into retirement is a more complicated journey than it was before. You've mentioned D B pensions Yes D C. Pensions with No got a new T options drawdown options. E think increasingly, property wealth will come into the mix as well on. That's quite a bamboozling presentation to put in front of my client and the best person to help a client navigate that bamboozling choice as the adviser. So now, more than ever, given low interest rates, given the complexity of choices, given the need to bring property into the mix, then the advisor is the person that's best place to help a client navigate that incredibly complex landscape. Yeah, I think that's true. And of course, property has its own issues as well at the moment. What one doesn't quite know where the property market is heading? There are very mixed signals and very different regional, uh, trends. If you like, the government seems to want to encourage more first time buyers, which you'd expect to increase house prices. But on the other hand, if we get a big increase in supply which clearly we need, then you might see some tailing off of the housing market, which, actually for younger people might be quite beneficial. But then advisers will need to help their clients perhaps talk about how to best work for the family help their Children. Do you think there's an element of intergenerational advice that advisors might benefit from talking through with their clients? I think that's absolutely e. I think we're seeing a new increasing, uh, complex generation who are looking after potential elderly relatives and looking after care aspects while also trying to encourage Children onto housing ladders or help them onto housing ladders. So I think that that generation is absolutely crying out for advice because the effects have been squeezed in aled directions. So to try and help these people deal with, you know, it could be divorced. That could be second families that could be helping people. Uh, you have long term care and inheritance tax implications that there's a huge amount crying out for advice in that kind of market. Do you think that there's any special advice that advisers might be thinking off for women? It's an issue close to my heart. We know that very often women tend to be less financially well provided for in general than men, especially if they're on their own. Have advisers got an opportunity here? Have they started looking at specific issues for the women in households. I personally think there is a new opportunity there for advice firms draws. I mean, I've come across some friends. I'm actually there are all women advising all women. Now, I'm not saying that that is necessarily what is required, but whether we all like it or no, we do need to remember that the industry that we work in on financial advisors themselves still very male dominated. Still, you know, middle aged. You know what we've We all speak at various events, you know, industry events and as our female being up on stage, looking out, sometimes you're lucky if there's five or 10 per Shane off. The audience are female. I think what that means is sometimes the need spin off. Women are perhaps no always at the forefront off mind. And I'm I'm trying not to be too, you know, and start to many feathers. But I do think that it needs to be considered a little bit more. But I also think this might upset people as well. Actually think as women, we need to take a bit more responsibility for ourselves. You know, the number of women that I know that are the breadwinner as and they do the earning. But just do not think about these things. So I do think there's a little bit of personal responsibility that we need to start thinking ahead. Not just short term. A swell Alison. Yeah, this is a delicate subject where danger of stereotyping, but one piece of it. One piece of insight I can share is that Aviva does educational sessions for people in their fifties. Andi. It's biased towards the women in the organizations that come forward. There is, I would say, speaking on behalf of men. There's an arrogance that we know all this. We have got it sorted. We've got it in control when many of us don't. I think women have the advantage of being willing, Thio said. You know what? I would actually welcome some help and welcome some support on. They do proactively come forward. I'm not. I don't know why that is. I'm not a gender specialist, but experience tells me that women are willing to listen. Men are war keen to talk on. Do you think there's a difference in risk? Appetite? E o. We do see that, and I think we and have ever tried to reflect that in the language that we use in our communications. There's a bias towards risk and performance and targets which play well. Thio arguably a male, biased audience but less so to the female biased audience. So we're we're trying to make sure our language speaks thio all savers, not just one community of savers, just to add to that as well. You know, we're obviously talking about, you know, diversity and thinking about females. But to go back to the start point off the creation when we're just thinking about the different generations, I think regardless of being male or female ah, lot off what needs to be taken into account. Now it's a more holistic tax planning approach. I mean, we obviously or I specialize in pensions, and, you know, we've all got different backgrounds here, but it's often bringing other tax shoppers or property into the next day, and certainly what we've seen over the last few months, where we've been able to help advisors with their clients at situations where perhaps, you know, older people are releasing money from a bond earlier than planned. Therefore there's a tax implication, but if you make a pension contribution, actually you could bring the whole tax possession down. So I think regardless off Jane's are I think the way we think about advice needs to be a bit more holistic rather than being, you know, secular and thinking. Just pain shouldn't just just bond. It's actually the overall position aunt. How advisors can help their clients to help their family members throughout these difficult times as well. Do you think that there is going to be more conversation about what the government's going to doing going to be doing on tax changes? Because, clearly, somehow or other, the government's going to need to raise some revenue? The idea of austerity and cutting spending is less likely to be forthcoming, but we've got this massive deficit. A lot of people are talking about tax increases. Do you think that advisors need to have that conversation with their clients? May be encouraging them to make the most of the generous. Released, perhaps, that there are a the moment What? What's your view, Alistair? Yeah, but I think you're right to mention the record deficit that we carry is a country this year, and I think all political parties, certainly the current government want to, as they say, balance the books over time. This current government has also given a commitment and its manifest or not to raising national insurance, not raising income tax or not to raising V A. T know that 60% of its tax raising powers put to one side on, Therefore, that brings the idea of pensions tax release into relief into frame. Aviva is very open to that debate, but we would say there's three requirements. One is we must not let any reform of pensions tax relief force as back and lose the ground of pension participation that would build up over the past decade. That would be a loss. We must ensure that any reform, the cost of any reform, is overwhelmed by the benefit of any reform. That must be a requirement. And also, any reform must include both D. C and D B pensions in it. If we can come up with a solution that is taking those three boxes, then I think there's a debate to be had. But it's it's a tricky debate to progress, I must admit from my chats with the Treasury and the DWP. I don't see any appetite for radical pension reform right now. I mean, it may come in the next year or two, but for the moment I'm hoping that the high rate reliefs are going to remain in place, at least for a while. So in terms of advisers talking to their clients, where do you think that conversation should head? I mean, there's also the issue of C. G. T know a couple of gains tax also was not a commitment so that there could be an issue there. What what's your view? Andrew s second capital against taxes ripe for review. So I think, you know, it seems inevitable. Some tack rises will come in at some point in time. I think you know, there's a lot of what else I said about pensions. Actually, D B is a big one. We can't look purely at D. C. D. C is probably easy, but to Dio, D. B is the difficult but to do. But it's a riel. That's where the bulk of tax relief goes, so that needs to be brought into to anything. Capital gains tax is probably easier. So when we look capital gains tax, most of the people having big gains are probably higher rate Taxpayers checked again they're paying is is effectively a kind of basic rate tax, so so it wouldn't seem a big shock if somehow tried to bring capital gains tax in line with income tax. E think that's quite a leveling up type of policy, isn't it? But, But again, the country probably does need to raise taxes somehow. Organ. So so So I guess, as advisers advisers might need to think about, Can they do things in advance? How can they think about what to do? So so that might be, uh, taking again of mutual funds to to use up a particular years alone's and then reinvested and a bond or something like that. So there's various strategies advisers could look to use. F A capital against tax charges is likely. Thio increase. Andi assed faras drawing down the money is concerned, and maybe the issue of Isis. Do you think there are some changes on on the horizon? Would you be expecting anything like that? Kirstie. I'm not so sure about changes unless they decided to completely reversed what they do and, you know, bring limits down or start track taxing. But do you think that we're potentially seeing eyes as being underutilized just now? Particularly stocks and shares Isa. So I think there's, ah lot of people who I mean, even if we take the current pandemic, those people who have been less effect did our spending lace but are still working. That money is just accumulating, and it's sitting on cash accounts, and I just think potentially if we taken account interest rates, you know, again for financial advisors, that's an opportunity for them to show the value that they can add By helping the clients, Investor and Isa would probably be the obvious place or pension. But if you don't want to tie up, Isa might be the place. So I'm no. I'm not entirely sure the ISA will be the target it might be. I'm probably leaning towards what Andrew was saying that in Capital Capital gains, but I think in the short term there's definitely opportunity there for clients. But even even if capital gains tax goes up, that increases the attraction of Isis, too. So you're right, Kirstie on Dallas. Go did you want to come here? I think when we look at the economic headlines, we see growth in the UK, it's it's it's collapsed. But slowly rebuilding spending is down. Employment is falling. One of the metrics that has boomed has Bean the savings rate in the United Kingdom going toe unprecedented highs this year. And how much of that is involuntary saving? We aren't traveling. We aren't going on holiday. We're not maybe going to restaurants. But some of it is voluntary saving. There has bean ah, rekindling of a love of saving. I believe that the periphery in the United Kingdom, after many decades of us falling out of love with saving it's for us in the industry to prove to clients and individuals that that is a good behavior for them to follow. So let's see this, this rekindling of saving in the culture of the United Kingdom and try and prove to individuals that this is a valuable use of their hard air and money Again, I see this is a great opportunity for financial advisers. You know, if people are building up savings balances, they don't really want to have all of it in cash but they might be frightened of where to invest it. How to invest it, um, on. If they don't want to tie it up in a pension, there's still quite a good icer allowance that they could park the money in and get it back instantly, too. So whatever age group, there's probably a conversation to be had about Isis and and there might be a conversation with clients. Is it better for me to buy a property for my Children or property to let or is it better to invest in the stocks and shares? Isa? What would you suggest? Advisors might answer to that kind of question from kinds Andrew. So I think the key there is diversification. So I think, you know, the biggest asset got the biggest to assets people generally have is a room property on the pension. So if you again Luke rug and to do pension, the look to invest and I have a property that that's a lot of eggs in one basket, so so that doesn't mean by toe. Let is bad, but But people need to consider in the round to to think about diversifying away from property to at least some extent. Uh, so So I can't using pensions and Isis to invest in equities and bonds. And things like that as well as properties is certainly key. Not just solely using property. Yeah, and of course, that's no. The icer advice and other advice isn't just for the very wealthiest clients. You know, the average client maybe building up savings now and be able to take advantage of some of the tax reliefs that are currently available. Is there anything you wanted to add their Astor? No, I think Andrew's touched on it. Diversification. I think we need to make sure the advice community is there to help. The workplace community is there to help, but increasingly, a direct population of people coming straight through Thio provided as well educated and support and giving them reassurance a very uncertain time. Yeah, I mean, curse to the other big issue that I think a lot of advisers could so help people with it is avoiding the scams. I mean, there are more and more scams. They're moving online, not just called calling Andi. Do you think advisers should be having a particular conversation with clients both for themselves? But perhaps also se Teoh to tell their Children or their parents about the risks. What do you think there, Kirsty? Most definitely. It's actually it's actually part of the guidance. And I think even on the PFS Gaeta income draw dying for new clients on bond client reviews are actually it states. There really should be having a conversation with your clients on the risks associated with scams. And we hear this all the time. But if it sounds too good to be true, it's too good. It's too good to be true. And I think I mean, I don't know. I don't know the starts. I don't know if anybody else has got them, but I would imagine that clients are seeking advice. Are probably succumbing to scams, less that battle. I'm going on a limps in that, but I would imagine that's the case, I guess, the question. But I mean advisors themselves. We've heard stories about, you know, big big firms, you know, succumbing to scamsters lot. So, uh, talking is being used by the police to just go looking into it. Yeah, there's I think there's a number of scam emails. I think him firms in particular were target and from registered on the E register. Yeah. Yes. E think advice firms themselves. Yeah, So I'm you know, I think various forms of being quiet by that. So I suppose it's difficult. What more can advisers? Dual doesn't have the conversation and raise awareness, but I think the non advised clients that are probably being target immortal more likely Thio to take action. I think we need to think about what we can do to address that. Yeah, Yeah, I think Rose, I've heard you speak on this and I think you've nailed it. I think the later maybe putting words into your mouth. But you cf and don't hang up. Yeah, just hang up. Just hang up. Exactly. And I think Let's keep repeating repeating that message, I think the other thing I would say, is the concept of vulnerable customers on the elderly. Maybe the people arm or competent, confident. During the height of lock down, many of their coal lines were had to be shut down. The one line that we, as an organization kept open was are vulnerable customer are are light and support for vulnerable and maybe elderly customers. So advisors through challenging times must make sure they continue to reach out to the vulnerable members of society who may be more vulnerable Thio scamming at this time. But, yeah, just hang up. Let's follow that mantra. Yeah, Kirsty, all I was gonna add to what Alistair saying is just the one point on vulnerable clients that I think advisors need to think about is actually what that definition is. Because there's probably be in situations where there's clients that would not previously being classified as vulnerable. That perhaps would not fall into that category because there stressed it under pressure that perhaps, you know, being furloughed. So and we have been speaking to advisers about that as well that we just need to be a bit more tuned into that existing clients that may now fall or lean towards being classified as a vulnerable clients. Yeah, Andrew, did you want to add anything there? Yeah, I think on the scams, it's it's clear there's bean evermore scams during the covered situation on becoming increasingly sophisticated. So some of the ones we're seeing a moment a very, very well done. So so it's no good. Not as easy to sport as he necessarily used to be so so. But I think that that's another big. But what advisors do that's that's a little bit unseen? Is just being a trusted aide Thio client who who can just fall in and speak to someone who on bound something off. So the biggest issue is people who don't have advisers in particular elderly customers. And I know my parents went through a few weeks ago. I got very close to toe losing money out of it, and and that was, you know, quite a sophisticated system. And it was It was very well done. It's very easy to fall for these things, so, yep. Well, the government's more and more concerned about it. The question is, Are they doing enough? Andi, what can one do? Trouble, I think, for me is that the response of government is very disparate. You know, there are all these different organizations who are responsible for in some way looking after customers who are scanned or stopping scans or catching scammers. But the public don't necessarily know enough about how to spot a scam who the scammers might be, and indeed, providers themselves don't have a central database that they can look up. You know, if someone else has seen a scam that they think might be Uh huh. Not bona fide e, but they're not sure if others other providers have already seen that. And had those concerns, there might be room for the database that they could look it up. Alastair. Yeah, I think I'll come to your database. And second, I think the two things I would say Thio providers and advisers is Let's make this simple for clients just hang up is very simple. The other thing that Aviva and maybe some other providers do we know provided a fraud hub that anywhere. Millions of customers think they may be vulnerable to fraud activity they could make. It's very easy for them to report it to us, and we will look after after them, So make it easy for all clients. This concept of a database, um, I'm starting to think of big government projects, and that makes me slightly shiver the challenge that may come with delivery of that. So So my Judy is a warning to meet a new early warning system, you know, if not for public consumption, but providers to look up if other providers have had suspicions. Maybe Andrew, I think, Well, I think that is as a good idea. I think it's been looked at in the past and there are some difficulties just we're sharing information about. People were just not being convictions and things like that, so probably difficult to share information about particular people. I think certainly we do need mawr at people like action for all. I can probably need to try and act quicker because certainly a bugle, it seems to be quite a slow, drawn out process that so actually try and close people down and try and take action. And also probably to publicize if we do get to the stage of convicting someone is is publicizing that widely so that people see, uh, the action has been taken because at the moment there's no there's no visibility of these kings. It also so I think there's definitely steps which which government and agencies can take. Yeah, I think the one thing that advises I feel can add huge value on over and above all the other areas is avoiding a scam. You know, they if you have a good advisor you wouldn't need to worry about the scam. And if somebody found you with an opportunity, normally you would say to your advisor, What do you think of it? Eso I'm encouraging government to try and recognize the value of independent financial advisers. You know, with so many scandals, it's been difficult, but hopefully we will be able to move forward. So current climate Z returns are low when there were no returns are low, so people might be looking for other opportunities. So So I think that some of the difficulty and even some of the ones I've seen it it's no people been saying you can get a 2025% return. Some of them have been quite, you know, you can get guaranteed 5% but that's quite black people. That doesn't seem hugely outrageous on DSO. People might be tempted towards that kind of going We're going might avoid someone who is promising, you know, huge returns. But it is just being super careful about everything that you're looking at, even if it's if it sounds okay, and it's difficult to imagine official interest rates going up much any time soon. So again, the conversation on the benefits of investment, focus on the capital gain aspect and the improvement in your capital rather than expectation of great income that you might be able to rely on or thought you could rely on in the past. Do you actually think that there will be negative interest rates in the UK? Would anybody like to take a a punt on that give a probability for negative interest rates? I, who knows? I would say unlikely. I think they were yet to be convinced that would have economic boost that we expect, um, toe have. And I think there's been some evidence of rekindling of growth in the U. K economy. Yes, my very low trough. But have we not seen that rekindling then? I think labeled nuclear option of negative interest rates would be stronger, so I'm I'm not betting on negative interest rates at the moment. But again, it's just another level of uncertainty that the advice community has to step forward and provide that reassurance. If I look at my calendar over the next 50 days, we're going tohave the impact of covert we're gonna have an American U. S. Presidential election on the UK is going to exit its transition agreement with the European Union. Any one of those is a massive event on. Then you've added negative interest rates into the mix. This is a very challenging and uncertain time for millions of people. This is a time for the advice community to be a cam, reassuring professional arm around the shoulder of individuals, and I'm sure they could be that I think the government could do with a calm reassure. E. My perspective on negative rates is that I haven't seen the evidence that they've actually worked, you know, we've tried them in other countries. The main benefit off, um, in my experience has been to weaken a currency that would just argue for for having mawr overseas diversification, perhaps. But Kirsty, would you have any thoughts on where we're heading in interest rates and markets? To be honest, because I don't think I can add anything to what yourself him, and I'll sort of said I thank him. Yeah, who knows for sure. But as you say, the research out there would indicate there probably would not do what the government would be trying to achieve. So I don't think he even a good thing. Good. Yeah. Uh, what about annuities with negative interest rates? How does that work? Do you think communities is something that people are going to come back to once interest rates stabilize a bit or fear that rates are going to keep going down so they might start buying annuities again? You know what? A ZA Really interesting discussion and debate. I think I'm not entirely convinced that people are going to start rushing out and buying a new taken, particularly at the lower end of the skill. The younger you are, however, you know, if you look at you know, some of the rates that are out there for older people on perhaps, as you know, you get into your mentally so sixties, maybe seventies, you can see that the rates do become a little bit more attractive. So I there's a possibility that we might, in years to come start to see people leading towards a guaranteed income. The older the gate. But I'm not entirely convinced that it's going to change the current trend that we've seen in the market. Andrew, you're going to jump in this? Yes. So I can, you know, I knew it is. Obviously, annuity sales have fallen after pension freedom, but actually over the last three or four years have been very stable and have been stable about £4.5 billion. Because kind of concept of annuities being dead I don't think is accurate because substantial numbers of people using annuities and getting value from annuities each year I agree completely. Kirstie. I think we will see a new It is being used differently in future. So So perhaps people just guaranteeing essential expenditure and having a draw the bop of God. So I kind of blend buying later in life? Absolutely as well. Uh, so I think it does definitely a place for annuities in the market. I can't go. Interesting fact to start the recent FC starts, which came out as the people who went to pension wise are more likely to buy an annuity. So So So people who decided themselves were probably more like I just take cash, but but it showed quite clearly very substantially. People who went and spoke to pension wise, many more dead by an annuity. So So it does sure having, uh, perhaps and and it's difficult to know just just from starts. But people who went and spoke to someone on came out in a different situation and more likely to buy in a new European. I I wish that people better understood the dangers of just cashing in your pension. You know, it's such a precious asset and the last money you should spend, not money. You should just cash in because you can even the tax free lump sum actually be. Most people, if they don't need the money, won't benefit very much from parking it in cash Aisa or a bank account, as so many do. Eso keeping it in the pension and being able to see it grow or pass it on to the next generation has benefits. I mean, obviously, some are worried about losing the tax free lump sum if there's tax reform. But on that is a, you know, an important element for discussion. Do you think, uh, pension providers have bean supporting advisors? Or how have pension providers being supporting advisers through the current emergency situation? And as you mentioned Alistair with Aled, these tremendous risks about to hit within the space of a few weeks what do you think providers e think? I think you're asking the wrong people. You get three providers and of course, we've been helping the advice community. I think we need to ask the advisers themselves. I think I think we shouldn't walk past the act of respectively. Keeping the lights on a time of national lock down is the fundamental, and we've kept serving and servicing millions of clients and their advisers. I think one of the big, because things that we've been investing in his support, education, the number of Zim calls, I think we've all been on with respective advisors and clients to give them reassurance, give them our perspective, give them guidance as much as we can. That's been where we've been redoubling our efforts on. Also utilizing this is a chance to to bring digital technology into this arena. I think I've even been on the record and saying that pensions remain in the digital stone age. We've all been forced to embrace digital technology like never before. I had never heard of them six months ago on bond on DSO. The winning businesses were the ones that I said before, they can adapt and transform So we're being there to try and be reassuring to our advisors as their reassuring to their clients as to whether we've done that. They're the ones to answer Nasty. Yeah, but echo everything that Alistair said as well. To be honest, I think we've all adapt. He didn't, and most advice firms that I've spoken to have adapted very, very well as well. We've spent a lot of times speaking to advisers about trying to help them streamline. The process is for the drawdown clients so really focusing on client views. What is The regulator wants to ensure that they're doing to make to the covered everything off. So just trying to help them have as robust, repeatable process as possible to help their farms going forward. In addition to all the things Alistair mentioned, of course, just keeping the lights on and service and as much as possible so I can take what you guys say a lot of it's trying to make life as easy as possible for advisors sorts of things like being able to apply online, not needing signatures, things like that, just to try and make things as straightforward as possible. Equally, whole education So we've been running Ah Siris of weekly Webinars for for advisers since March just to try and keep that education piece going, you know, sort of. Traditionally it's bean advisers goto the local events where you got the hotels or wherever to to try and get education. So so just to try and keep that education going and running in a very simple way and actually can provide building on what hours, I said, I can't get the feedback to that's been so good on DSO. Many are doing it that I would imagine that will continue into the future, and we'll see lots more events continue to be virtual going forward because in a way, it is a better use of people's time just doing that for for another assault without leaving the office. So I think that's one thing will continue beyond covered well, clearly good providers like Prudential, Aviva, Canada Life have bean helping Financial Advisors and Financial Advisors convention fit from that to help their clients were just about out of time. So maybe you could each give one final thought that you'd like to leave advisors with as we head into the next few weeks. Can we start maybe with you? Other stuff, I think, and everything I do, I try and separate the heat from the lights. There's a lot of heat around at the moment, a lot of speculation, a lot of room or a lot of anger. Our job is to be calm and provide the light to a very confusing world. And so if we can separate the heat from the light, I think we're playing our part in a very difficult time. Andrew. So I think from what we've seen over the last hour, because there's a fantastic time for for advice to show the value of advice. And I think that's one of the big difficulties as an industry in in in the past is actually demonstrating the value, have got advice, and I think the last year or so has shown good value. Get advice can bring eso. Eso is trying to get out and get it to a bigger audience. And Kirsty, you have the final word here. Yeah, equal exactly what you've been saying. I think this is, ah, time off, huge uncertainty for a client. So it's just about, you know, working with them and helping them to understand the potential concerns and dangers but helping them to navigate that them through that and give HMAS much support as possible on I think that the advice community are are doing that well, that's a great note to finish on. Andi, I would like to thank our three brilliant Panelists Andrew Tally from Canada Life Kirsty Anderson from Prudential. Alister McQueen from Aviva on to all of you out there. Thank you for listening. I hope you found this interesting, helpful stimulating on DWI all wish you every success with your clients as we go forward in this really challenging but exciting time.