This month saw one of the most significant changes in the history of Pensions. Much has been be written about the merits of providing investors with this greater flexibility and the concerns about potential scams. The focus for this piece is on what Adviser practices should being doing to ensure their operating model is optimised to manage this market development.

The operating model of any business is made up of three core features; people, process and systems.


The obvious focus area here is on knowledge. Those with advice permissions will clearly need to understand all the options, as will paraplanners who might be tasked with preparing reports and/or suitability letters. It is equally important that operational staff, who will field client questions about issues such as income payments, tax codes and withdrawals, have a strong understanding of the new rules and the practical implications of those for clients.

Firms may choose not to allow all advisers to operate in this area and as such it would be advantageous if client management systems managed this as part of their support for business monitoring and training and competence.

Building a training plan is a logical action as is looking at personal development plans. It might be adviseable to breakdown the training into the technical elements of pension changes and the impact on investment management. Learning is one thing but how do you evidence success? A sensible suggestion for administration teams  is a simple quiz and why not make it fun by offering a prize.


The impacts on process are many and below is a list of just a few of those that are worthy of review in light of the new rules.

* Assessment of risk and capacity for loss
* Investment selection and research
* Advice reports
* Suitability letters
* Monitoring income payments
* Review reports
* Requests for new withdrawals or changes to existing

A hugely important piece here is ensuring that prospects and clients receive clear communications. The topic is a complex one and therefore making sure reports, emails and letters are all consistent in how they provide information, to clients taking up these new opportunities, should be a priority. Looking at new business  processes it will be important to ensure there are procedures to check that withdrawals have been correctly set-up and that payments are being made in line with expectations. Understanding what different providers will need to process this business and what communications they will issue directly to clients is another piece of work.

The introduction of this new flexibility and the need to build or refine processes to support it, could be catalyst for your business to look at how you can make wider improvements and drive increased automation into your operation. You can read more on this topic here.


Undoubtedly systems will play an integral role in helping you optimise your operations and deliver a great client experience.

Above we highlighted the potential need to review how you assess risk and capacity for loss. With the focus more on income, is a traditional approach or tool still valid? If working with a tool provider it is worth questioning them on their strategy and if applicable reviewing the market.

The same can be said of financial planning tools. Modelling cashflow becomes even more valuable in the context of Pensions Freedom and once again firms will need to ensure their chosen application can support advice in this space. An obvious consideration will be your platform partners and in particular your strategic relationships. What developments have they made to streamline processes from new business to amending withdrawals? If the suggested demand becomes reality some updated due diligence could well be appropriate, particularly around their capacity to manage high volumes of withdrawals within service levels.

Lastly can you be creative about how you educate clients and prospects on their options. Webinar technology is widely available and a great way to reach people without travel and without disturbing them at home or work. Client portals are good place to share documentation including your Marketing collateral or even generic information such as that from the Money Advice Service. Using animated videos is fantastic way to take a complex topic and make it simple by telling a story. Creating videos of this nature is very affordable and many offerings exist including Videoscribe or you can even source suppliers through a service called

Mark Davidson