Andy Haldane, the Bank of England’s Chief Economist, has provoked fierce backlash in the financial industry with recent comments suggesting that financial advisors were clueless on the subject of pensions and advising their customers how to manage them. He said his remarks were based on countless exchanges with financial advisors who had failed to grasp issues regarding pensions, claiming they are simply too complex for them to understand.
Widespread Miscalulation of Pensions
For the general public, recent changes to pensions have certainly provoked both controversy and misunderstanding. There are now web pages devoted entirely to understanding the changes and the Guardian newspaper recently reported on the widespread miscalculation of pensions with a provocative piece titled, “How did we get pension calculations so wrong?”
However leaders in the financial advisory industry claimed that Haldane’s comments were a shocking generalisation for someone in such an elevated position.
Many were quick to express their outrage online, and Twitter in particular proved a popular platform. Haldane himself came in for criticism, not just with regard to the comments on pensions. Michael Barrett, The Lang Cat’s consultancy director, expressed his misgivings in Haldane’s judgement after the Chief Economist described himself as being only “moderately financially literate”.
Complex New Rules
However, other professionals were willing to concede that pensions are indeed becoming increasingly complex, commenting that the changes to lifetime allowance in particular had caused confusion. If customers and clients rely upon reputable firms like Robert Stones Target Markets and others renowned for their experience, such changes are unlikely to cause problems. Others agreed that although the issues were complex, they were a job for professionals and not beyond their reach. Some were confident in the abilities of staff at Robert Stones Target Markets, established advisory businesses and their own firms.
Rob Milne is the managing director of a Guildford-based financial advisory firm. He commented that his team and many others were “properly trained” and completely qualified to advise customers on pensions. Milne added that Haldane had perhaps spoken to unqualified advisors, but warned against grouping all financial advisors under the same negative generalisations.
“I am confident that my team can advise effectively on pensions, in spite of the complexities. I would encourage the public to seek the advice of professionals on the matter.”