RDR-ready

The FSA recently published data saying that it is the large financial advice firms that are struggling to adapt in time for the RDR reform deadline of 31^st December 2012, whilst small firms are ahead of the game.  PageRussell is a firm that is proving the FSA right:

• All three of our advisers had their Statement of Professional Standing before Christmas 2011 – over a year early.
• We’ve charged fees for over 10 years and over 94% of our income is fee-only or fee-based.  As a result, we operate a proven fee-based client service proposition which is RDR-ready.
• Not only do we plan to stay independent; we know how we are going to do it: http://www.pagerussell.co.uk/wp-content/uploads/120208-Independence-Whitepaper.pdf

Financially secure

Most financial advice firms will suffer a sharp drop in income when they switch away from commissions to fees.  For these firms the end of 2012 and 2013 will be “touch and go” to see if they survive as businesses.  Working for PageRussell you won’t have this worry.

PageRussell has increased its turnover during the financial crisis and holds significantly more capital than the FSA requires us to.

Over 75% of our income comes from ongoing fees.  Because our income is stable we can plan our expenses (such as hiring new employees) with confidence.

Opportunity for career progression

Joining PageRussell now will ensure you have to opportunity to progress your career as the business grows and existing staff retire.

What you’ll be doing

Our clients are individuals, business owners and trustees who rely on us to help them implement smart solutions so they have enough money to live the life they want.

You will be working with a highly-qualified team of financial planners and administrative support.

As the engine room of the financial planning team your focus will be on:

• Research
• Recommendation (to the financial planners)
• Report writing

You will also help with developing our reports and process manuals.

Being a small team means we all get involved in other administrative activities at times.  If you are not happy answering the phone, sending out marketing packs, or calling Prudential to get missing information (again) then this is not the place for you.

We are a growing business.  In time, for the right person, the role could evolve into a para-planning team manager or head of operations role.

 About you

You have good technical knowledge across most areas of the market, with a bias towards pensions (we don’t get involved in mortgages or group risk).   Ideally Diploma qualified, you’ll be looking to progress to Certified or Chartered status.  (The IFP’s Certificate in Para-planning would be fabulous, but we know this new qualification is not widespread yet).  We don’t expect you to know all the answers, just where to find them.

You’ll be operationally-minded; by which we mean you would prefer to write reports and improve our processes, rather than trawl the HMRC website for technical details or get lost in a spreadsheet.

Most importantly you will be able to think on your feet, be a great problem solver, happy taking ownership of a caseload and take pride in being a professional para-planner.

 About us

Many financial advisers claim to provide a financial planning service.  As an Accredited Financial Planning Firm, PageRussell does.  As a result we have long and close relationships with our clients – they are part of the family.

If you join PageRussell you can be confident you are working for a firm that is ready for RDR and looking to profit from the opportunities these reforms present.

How to apply

Please submit a covering letter explaining:

• What you would enjoy about being a para-planner
• Why you want to work at PageRussell and not somewhere else
• Why we need you on our team

Also, please attach the following:

• An example client report (please don’t include any real client details)
• Your CV

Email everything to ku.oc.gnitlusnocrheroomnull@ykceb with “PageRussell” in the subject line.

The DWP have announced plans to delay the auto-enrolment deadline for small businesses (with less than 50 employees) to dates between 1st June 2015 and 1st April 2017.  For some firms the deadline is delayed by up to two years.  You find out more here.

At first sight the post-RDR rules on independence appear too strict.

It seems the associated costs of the new rules mean indpendent advice could only be available to the most wealthy.

At PageRussell we think an answer is the use of panels, backed up by a regularly reviewed investment process document.

The FSA now call this a Centralised Investment Process.

Click here to find out more about how PageRussell plan to stay independent and in business post RDR.

From 1st January 2013, the Financial Services Authority will require all financial advisers to hold a valid Statement of Professional Standing before they give regulated investment advice.

A Statement of Professional Standing is provided by an Accredited Body, such as the Institute of Financial Planning, and confirms an adviser has the correct qualifications, has kept their knowledge up to date and adheres to the FSA ethical code of conduct.

PageRussell is one of the first firms in the country to have all their advisers  awarded a Statement of Professional Standing.

Check our advisers’ Statements of Professional Standing.

IFP is the professional body for Financial Planners in the UK. It awards this title only to firms which it has assessed as demonstrating the highest professional standards of Financial Planning service and advice to its clients.

Richard Page CFP^CM comments : “PageRussell is delighted to have achieved this powerful recognition of our commitment to professionalism and outstanding client service. Our clients expect and deserve only the highest standards of advice and service as we work with them to plan their finances so that they can achieve their goals in life. We’re proud to deliver a service which they value and which has now been externally recognised too.”

When looking for professional Financial Planning firms in the UK, consumers should look for Accredited Financial Planning Firms as the hallmark of quality, and to find the services of CERTIFIED FINANCIAL PLANNER^CM professionals, the only globally recognised standard of professionalism for Financial Planners.

The only constant in the world of pensions is change.  The rules for pensions changed again in April 2011.

The PageRussell retirement income guide is designed to help you understand your post-retiremetn options and make good decisions about your financial independence.

Download your guide here

At PageRussell we know the benefits a flexible retirement policy can bring to a business.  A large proportion of our clients approaching retirement want to slow down rather than stop work completely.   Employers will soon have to accommodate their employees’ wishes to work on, as from April to October 2011 the Default Retirement Age (DRA) is phased out.

We asked Becky Moore, a PageRussell client and HR professional, to write this Briefing Note and equip our clients with solutions so this change is a positive one for your firm.   This Briefing Note is aimed at employers, but will also be of interest to employees who are approaching the age of 65.

What is changing?

Currently, the only time an employer can force an employee to leave service (other than for disciplinary matters) is when they reach the Default Retirement Age of 65.  Currently, employees have the right to ask to continue working, but employers can refuse.   From 1^st April 2011:

• Employers will not be able to force an employee to retire at the age of 65.
• Employees have the right to continue working past the age of 65 if they wish too.

Is it still possible to have a compulsory retirement age?

The typical employer is unlikely to be able to enforce a compulsory retirement age.  To do so the employer must be able to justify it objectively for one or more of the following reasons:

• Economic needs
• Health, safety and welfare
• The particular training requirements of the job

If it does achieve those aims, the discriminatory effect must be significantly outweighed by the importance and benefits of achieving a legitimate aim, and reasonable alternatives should be sought first.

Some groups will be unaffected by the removal of the DRA such as police and the judiciary, partnerships, and where there is a statutory age limit e.g. commercial pilots.

What if you want to retire an employee who is 65 before 1st October 2011?

If an employer wishes to retire an employee who is 65 on or before 1^st October 2011, you can legitimately follow the current procedure and retire them from the organisation.  You are required to give the employee a minimum of 6 months notice that you would like them to retire.  Provided this process is commenced before 1^st April 2011, and then no claim can be brought by the employee.

What about benefits-in-kind?

The costs of insured benefits-in-kind increases dramatically over age 65.  The new legislation exempts group risk insured benefits (including income protection, sickness and accident insurance, as well as private medical insurance) for employees amd employees’ dependents.  So it will be possible for employers to cease to provider or offer insured benefits to employees aged 65 or above.  This age limit will increase in line with the State Pension Age.

Having no retirement age does not have to be a problem

Having employees working on past 65 has a number of benefits:

• They are motivated.  If an employee could retire but doesn’t, they clearly want to work.  Wouldn’t it be nice if all your staff were like that?
• Many older workers may wish to work fewer hours, so there is less pressure on their weekends and holidays.  Older workers are often happy to work weekends and holidays as they can still do their leisure activities during the week when venues are quieter (and cheaper).
• There will be many other benefits for your firm; you just have to think about it for a bit.

Watch points

There are a number of actions employers may want to take now:

• Check the age profile of your firm to check who will be 65 prior to 1^st Oct 2011 and start the retirement process sooner rather and later if you do not wish them to carry on working.
• Contracts of employment, staff handbooks and retirement policies may need to be reviewed.
• It will no longer be acceptable to ask an employee whether they are thinking of retiring.

What do you need to do differently?

This change is all about having objective measures of all your employees’ capability to do their job – whatever their ages.

The policies and process employers need to put in place to manage the retirement process will also help employers avoid other types of discrimination problems.  These need to include better job descriptions, job specifications and skill profiling, improved performance management, better training for line managers and a more strategic approach to retirement.

Some employees can apply for flexible working, although many employers have extended this to the total workforce.  This is another way to manage an age diverse workforce, provide job satisfaction and increase motivation.

Offering continued or flexible working instead of retirement can help retain your skilled and experienced employees, reduce staff turnover and recruitment and training costs.

ACAS have published a very useful employers’ guide to working without the default retirement age.

As ever the devil will be in the detail and we will publish updates on these changes when available.

If you require more information and advice on how to do this in practice, please contact Becky at Moore HR Consulting 07872471072 or ku.oc.gnitlusnocrheroomnull@ykceb.

Important declaration

This document does not recommend you buy, redeem or vary any regulated investment. It is believed to be accurate as at 29th September 2010; however no warranty is given as to its accuracy and no responsibility can be accepted by Page Russell Ltd for any action taken in reliance on its contents.

Following the government’s announcement on Wednesday 20th October, more people will receive their state pension later than was previously the case.

We know that the lastest changes will affect at least two groups of people:

• The state pension age will be equalised with men at 65 for all women by November 2018.
• The state pension age for men and women will increase to 66 between November 2018 and April 2020.
• The planned increases in the state retirement age to 67 and then 68 may also be brought forward.

We will not know exactly how our clients will be affected until these changes are passed into law - probably sometime in the summer of 2011.   In the meantime the government have issued the following handy table. (Please note that the State Pension Age calculator on the Pensions Advisory Service website will not include the new changes until they are passed into law).

It is important to remember that you do not have to stop work at your state pension age.  If you have enough money saved you can stop work earlier.  Or from April 2011 you will have the right to keep working past the age of 65 if you want to.

There has already been much fevered speculation in the media about what this will mean for public sector employees.  Some PageRussell clients have asked us if they should retire early or opt-out to protect their benefits.

The answer is that no public sector pension scheme member should make any knee-jerk decisions now and should take independent financial advice before doing so.  Here is why:

Not every public sector scheme will be affected

Firstly, not every scheme that some people think is a “public sector” pension scheme is affected. To check this click here. 

Any pension earned to date is safe

The terms of reference for the report say any recommendations must protect “accrued rights”.  That means any pension rights you have built up to date will be safe and not affected by any changes.

Therefore if you have already retired or have left employment and have “deferred” benefits your public sector pension will be unaffected.

Not all the recommendations will become government policy

Don’t forget this is a report with recommendations from an “independent” commission.  Not all of the recommendations may become government policy.

The government can’t make the changes without parliament

If the government decides to accept the Hutton Report’s recommendations it can’t make any changes without passing an Act through parliament.  That is easier said than done with a coalition government.  Even if the government does get its proposals through parliament largely unaltered, this will take at least a year, may be two, to achieve and be implemented. 

The public sector pensions will still be based on earnings

Even if the basis of pension accrual changes from final salary to career average, the pension will still be a “defined benefit” pension.  This means the costs and risks of paying the pension will still rest with the pension scheme and ultimately the taxpayer.

Most private sector pensions are now “defined contribution”.  This means the employer is only responsible for paying contributions.  The risk of the pension fund not growing fast enough to provide an adequate pension at retirement rests with the employee.

Therefore we can expect public sector pension pensions to remain significantly more valuable than the typical private sector alternative.

Speculation not fact

Right now much of what is being said on this subject is speculation and opinion, not fact.  PageRussell recommends you ignore all the instant “rent-a-quote” opinions that will dominate the media now.  The report is a weighty tome and will require a day or two to read and digest properly.

PageRussell will issue an update to this post week commencing 14^th March.