IFAs 'Do Understand Pensions' - Retirement Angels
17 September 2012 (PLANSPONSOREurope.com) – The chairman of financial advice firm catering to members of workplace pension schemes has defended his profession from the accusation advisers lack pensions knowledge.
But Independent Financial Advisers (IFAs) should not be seen as a solution to all defined contribution plan problems, according to Alan Higham of Retirement Angels' Annuity Direct business.
His comments follow United Utilities head of pensions Steven Robson questioning, last week, whether IFAs were necessary to help increase participatory rates in DC schemes on the grounds they “do not understand pensions” (PSE online, 12 September 2012).
But Higham told PLANSPONSOR Europe: “I can understand - when you’re looking at the average worker who may be on £25,000 and is going to be automatically enrolled - asking whether there is any real value in paying a financial adviser to talk about the merits of being in or being out.
“The whole point of auto-enrolment is to change [employees’] ways of thinking so they don’t have to have somebody explain the benefits of saving just to get them to start to save.
“You just make them save straight away and they have to get themselves out of it, so I’m on board with that as a way of doing things if.”
But he added: “I would reject totally that IFAs don’t understand pensions. I think [Robson] is doing the profession a huge disservice there.”