With a new year comes the chance to turn over a new leaf. To start afresh, make a positive change, leave bad habits in the past.
It also gives us an opportunity to reflect on what worked well in the previous year and what we would like to see improve over the coming 12 months and beyond.
Maybe you’re discussing such things with your clients. What do they want to work towards this year? Are they on track to achieve their longer-term goals? What could they be doing better to reach them?
You might even be taking a closer look at your own business. Is it performing how you’d like? What could be streamlined to allow you to focus on more meaningful matters? Are the providers you partner with still the right fit? Are they making it easier or harder for you to meet your Consumer Duty obligations?
Higher expectations around the standard of care customers receive means service levels are in the spotlight
Higher expectations around the standard of care customers receive means service levels are in the spotlight, and rightly so. I think this will continue to be a big focus in 2025.
If the SIPP market made any new year’s resolutions, improving service standards and fostering confidence should have been high up on the list. Especially as prior to Christmas the FCA warned it has observed “pockets of poor practice” in the SIPP market.
In fairness, the regulator also noted many SIPPs are operated to a high standard and pointed out that the products allow people to make more active choices about their pension investments.
But it admitted regulation “has not always kept pace with the variety of business models” and therefore suggested the FCA may well need to make some changes to its framework so consumers can “buy a broad range of SIPP products with confidence”.
A more “prescriptive” approach may be required to better supervise SIPP operators, although the regulator is deliberating about whether it needs to give “specific considerations” for the bespoke segment of the SIPP market.
The regulator is looking at this as part of a greater emphasis on customer needs and customer outcomes – and we all know the importance of avoiding foreseeable harm.
Sadly, too many customers have had to deal with the fallout after various collapses. We’ve seen 15 SIPP operator insolvencies since 2018 with, as the FCA highlights, “others coming close to failure”.
When things do go wrong, advisers will all too often find themselves bearing the brunt
These things can take time to resolve. Then we have the seemingly constant march of consolidation with buyout issues starting to come to light.
There are always lessons to be learned and it is clearly right that the regulator flows these back into the regulatory framework.
Service levels can differ widely. I’m sure most firms take service seriously but there’s no getting around the fact that some will be delivering it better than others.
The difficulty for advisers is poor service from providers can make them look bad in front of their clients. Clients may not be aware about all the various links in the chain – what has to happen before advisers are able to make their recommendations, or how they work around the poor service they are receiving so clients don’t have to deal with a lot of it themselves.
It’s not just the SIPP market at fault here. I read an article on Money Marketing towards the end of last year that stated 95% of advisers apologised to clients for poor platform service. That’s a staggering statistic.
The article cited research from Parmenion and the lang cat, and referenced the fact that advisers are starting to vote with their feet in ways they haven’t done before.
The Consumer Duty may well have something to do with that. I can understand why some advisers may have previously been reluctant to switch providers. It can be a daunting prospect – there’s a lot to consider.
If a client was receiving such poor service from an adviser, you’d hope they would consider looking elsewhere and maybe come knocking on your door.
It can be all too easy to stick with the devil you know. The fear of the unknown and whether the grass will genuinely be greener elsewhere can prevent people from making necessary changes.
Yet when things do go wrong, advisers will all too often find themselves bearing the brunt. If it feels like nothing is being done to put things right, then trust can be eroded. Can you truly trust all the providers you use?
If it’s a case of new year, same old provider then maybe it’s time to say goodbye
If you use a firm that has been affected by consolidation or change of ownership, what has been the impact on service – none, positive or negative?
Don’t let clients vote with their feet and walk out of your firm because of the poor service you are having to put up with. Could the new year be the perfect time for you to pay closer attention to providers? What service can you expect from them? Are you confident the due diligence you carried out is still relevant?
Clients pay for everything in one way or another, so we owe it to them to improve service standards, increase transparency and make them feel confident their hard-earned money is in good hands. Your reputation is on the line if service challenges do not improve.
If firms are actively trying to make things better, that’s great – let’s hope they manage to achieve it. But if it’s a case of new year, same old provider then maybe it’s time to say goodbye.
Matt Storey is head of business development at @sipp
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