Weekend Digest for Financial Planners/Advisers & Paraplanners (19th & 20th Jan)


If you are on Twitter, you must have seen the stir caused by a tweet from Paul Lewis, host of BBC MoneyBox programme and no doubt my post that challenged Paul on his comment! In fairness to him, Paul has acknowledged that was probably not his finest moment! Having listened to the programme, I still think the tweet is very misleading but enough said!

Moving on… here’s the latest installment of Adviser Digest, with a summary of the interesting articles this week. Click on the title to read the full article (opens new window).


26 March 2013: Date for Maximum Income For Capped Drawdown Change To 120% GAD

This piece by Greg Kingston of Suffolk Life  is a very useful guide on the HMRC’s draft legislation today to restore the maximum income limit for capped drawdown to 120% GAD.

The change will apply to those with drawdown pension years that begin on or after 26 March 2013 (although this date is penciled in – it could be later).

There a few very important things to bear in mind…

  1. Anyone in a drawdown with a pension year that begins earlier will remain limited to 100% GAD. So if you have clients whose pension year begins before this date, it is important to let them know that  maximum GAD will still be 100%!  And, 120% maximum GAD will not apply until the beginning of their next pension year, subject to the provider granting their request  a review,which may come at a cost.
  2. While it is possible to requests to review, it is not possible to force an income review mid-year to move directly to 120% maximum GAD. Pension years remain fixed even if a review is requested mid-year.
  3. Those still on the five year review cycle from 5 April 2011 and earlier, and 120% maximum GAD prior to the reduction to 100% maximum GAD, will still be impacted. If a review is carried out for example at the end of their pension year, following a transfer, it is likely that the level of income they can take will be impacted because gilt yields are likely to be lower. They will also move onto the three year review cycle.
  4. For new clients planning to go into a drawdown, it is probably better not to crystallise their benefits until after this date, unless there’s genuine urgency to do so! Whether or not client intends to take the maximum 120% GAD income,  the flexibility to be able to do so is very useful.



8 Keys To Better Business Writing


This great article by Susan Adam on Forbes is a concise summary of a new book from Harvard Business Review Press, HBR Guide to Better Business Writing by Bryan A. Garner,  to help you improve your written communication, with clients, staff members and professionals who refer clients to you.

The book is lean at 200 pages but it boils down to these 8 point;

  1. Know why you’re writing.  Sound obvious right? Well sometimes for someone of less than average writing skills like me, it can be really hard to pin down who I’m writing to, let alone what the hell I’m trying to say! Be clear about your objectives, including the audience you’re addressing and the goal you want to achieve. 
  2. Understand your readers. Get to the point quickly, focus on what’s relevant and use a tone that fits your audience. Apparently when Warren Buffett pens his annual report, he pretends he’s writing it for his sisters who are smart but not experts in finance!
  3. Write your first draft quickly. According to the author,  writing preparation can involve four different processes,  namely Madman, Architect, Carpenter and Judge. The Madman does the research, the Architect organizes the material, the Carpenter writes the first draft and the Judge edits and tightens.  When it comes to the writing stage, it’s best to barrel through a draft without waiting for inspiration or perfecting as you go. If you’re stumped by a section, skip it and finish the next part or the whole piece before circling back.
  4. Revise and edit. A few questions you should ask yourself when going over your piece: Have I told the truth? Have I said all that I need to say? Have I been fair and diplomatic? Do I have a clear, concise opening? Have I proved my points with specifics? Have I avoided lame repetition? Do I close my piece clearly with prose that sounds fresh? As for editing,  save words, hone phrasing, make the piece more interesting and make the sentences flow.
  5. Be relentlessly clear. Show, don’t tell!
  6. Don’t waste words.
  7. Never use business-speak
  8. Relax and find the right tone


OFT To Conduct Workplace Pensions Market Study

 Following the introduction of auto-enrollment,  the OFT announced this week that it is conducting a market study to examine whether defined contribution workplace pension schemes are set up to deliver the best value for money for savers.

At present around 4 million people in the UK are saving into a defined contribution pension scheme and additional 6 to 9 million workers will be enrolled in a scheme by 2018. It is expected that annual contributions to workplace DC scheme will rise to  £11 billion by 2018.

The study will investigate whether competition will work in the best interests of these scheme members to deliver low cost, high quality pension schemes. The market study will focus on value for money and the size of pension pot savers end up with at retirement.

It will look at the following:

  • How pension providers compete with one another and how the market may develop over time.
  • Whether there is sufficient pressure on pension providers to keep charges low, and the extent to which information about charges is made available to savers.
  • Whether smaller firms face difficulties in making pension decisions in the interests of their employees.
  • Whether smaller firms receive appropriate help and advice in setting up and maintaining workplace pension schemes.
  • Barriers to switching between schemes and a potential lack of ongoing employer engagement in setting up and managing pensions.

Sadly as Pension Expert Ros Altmann pointed out on Twitter, the study will not consider decumulation phase (annuities, drawdown etc.)

The OFT plans to complete the study by August 2013



What If Financial Planning Was More Like A Build-A-Bear Experience?


This article by Michael Kitces delves into clients’ experience of financial planning process, likening it to “a blend of a dental exam, math class, and marriage therapy.”

While  the outcomes of working with a financial planner are positive, the actual experience of going through the financial planning process is not always pleasant.

Kitces compares financial planning experience to the Build-A-Bear workshop, which  differentiates itself not by the product it sells – teddy bears – but by the experience that customers engage in to get the teddy bear, as children visiting Build-A-Bear literally build the bear from scratch. 

“The end result – the entire process turns from a few minutes at a cash register or website into a multi-hour interactive experience, the children have a much deeper buy-in to what they get (as their tagline notes, Build-A-Bear is not where teddy bears are bought, but “Where Best Friends Are Made”), and customers spend twice as much or more to get the same commoditized product at the end!’

Kites posed the question; ‘what if the client financial planning experience was more like a Build-A-Bear experience, where your clients happily pay twice as much for your services and want to spend hours going through the process and the experience of it!?’

While financial planning  NOTHING like building a teddy bear both, both in term of financial and psychological impact,  Kitces points out the need to re-envision the experience from a client’s point of view and to focus  the experience on the client, not the planner or the plan!

Is there a way we can make financial planning simpler and more enjoyable? “What if the client “discovery” process of personal goals and issues was not just some notes a planner scribbles on a yellow pad, but an interactive mind map that the planner and clients build collaboratively?”

And what delivering the plan which is often in giant tomes which no one actually read?  This reminds of a quote I heard recently from Campbell Edgar of John Lamb ‘the ticker the plan, the thicker the planner?

‘Imagine if the plan is simply live software on a giant screen in the planner’s office (and online), which can be updated interactively with the client?’ Client can ‘see’ their financial future right in front of them and enjoy playing around with various scenarios!

The end result? Instead of a slow, tedious process that no one else talks to their friend about,  it becomes an enjoyable experience for clients,  leading greater engagement with the plan and no doubt more referrals as client share their experience with their friends and family members!


I hope you have enjoyed this and hopefully it’ll make you job a little easier! As paraplanners, that’s what we do! As usual, thought and comments are welcome.  

After the troll on Twitter this morning, I am resuming my role as the official driver of the household! May be even share a bit of Mrs O’s retail therapy to cool of! Enjoy your weekend!









Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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