The debate around this topic, ongoing for some time now, has recently been brought back to the centre of thinking for many trustees and sponsors (stakeholders) by the publication of the joint paper by Royal London and Eversheds Sutherland. As a firm of financial advisers, we are approaching our half century of ‘business as usual’ appointments; we advise scheme members who are considering their retirement options. In this article we will explore the reasons stakeholders seek to provide this service to members, whether fully or partially funded.


However, we should start by being clear that there is no right or wrong answer, it is a matter of choice.

It is also essential we bust a myth: this is not and never should be about pension transfers. Why? Because a pension transfer is only ever one potential option of a retirement plan, irrespective of age and only in exceptional circumstances.

It is time to change the music and stakeholders can be influential in doing so, helping ensure members are protected, because even today it is still true the income from their safeguarded scheme is amongst most peoples’ largest or most secure assets.

So, why do, or might, a stakeholder appoint a financial adviser? There are the obvious reasons such as the lessons learned from British Steel and the recommendations in the Rookes report.

We would suggest a much more important and fundamental reason than that: member welfare.

In the past, when members reached age 50, started to think about retirement and obtained their quotations, it was often good news, especially if you were a member of a final salary scheme. You could afford to retire and do those things you never had time to do; reward yourself for all that hard work.

Indeed, for the lower paid, income replacement levels from all sources, including state pensions, could often exceed earnings.

Now of course, long service within a safeguarded arrangement is often little but a distant memory for many.

So, as members approach the point in their life when they think about retirement, reality is a bit of a shock. Many cannot afford to retire; certainly not with a standard of living that rewards all those years of hard work.

This means a typical member is now left facing hard choices and a very different pathway to retirement. This may include a longer working life and perhaps even a mix of part-time work and part-time retirement, until the point they are eligible to receive their State pension.

Helping members and employees navigate this new reality is where accessible, affordable, trustworthy and high quality financial advice comes in.

A good adviser can help individuals make these choices and help them to be able to retire by ensuring they learn about the member’s values, objectives, needs and wants. A good adviser will help people build their best, most practical retirement plan, ultimately helping that person live the life they want, or otherwise help them reach life’s natural compromises. It is all about making informed decisions.

A good adviser will help people build their best, most practical retirement plan, ultimately helping that person live the life they want, or otherwise help them reach life’s natural compromises.

Stakeholders have a choice to make here. They can let members find their own way, with the risks that entails, or they appoint a financial adviser or a panel of financial advisers, to create access to trusted advice. Doing so ensures advice can be available and cost effective. This does not mean cheap; it means members can benefit from the cost of learning all about the scheme being spread across 100 or 1,000 individuals, not 1 or 2. It is simply logical that the cost of advice to the member or employee is reduced.

Stakeholders not only ensure the reduction is passed on, they have a role in ensuring the adviser evidences they understand and will properly communicate the benefits and options of the scheme. After all, how can the member even consider alternatives if they are not fully informed or aware of what the scheme can do for them in its current form. This is how you turn a pension a member does not fully understand into money, which then translates directly into their personal needs and wants, which of course they do understand. This is the value at its core, the point at which protection truly starts and informed decisions become possible.

Focusing specifically on trustees for a moment and the challenges they may face if they consider providing access to advice. My colleague, James Ellison, applies the phrase “damned if you do, damned if you don’t” to cover the quandary in which trustees find themselves when considering whether to appoint a financial adviser. This is a powerful and relevant phrase. Yes, trustees could be criticised if an adviser they appointed makes a mistake, but evidence exists which shows they can just as easily be criticised if they do nothing. Trustees will need to decide where they believe the balance of risk sits in choosing what to do.

Personally, whilst I understand the quandary facing trustees, I always think it is worth remembering that change is rarely delivered by choosing to do nothing, but instead by choosing to act, by being positive, even if that means widening a remit: there is no wrong way to do right.

A good adviser will help people build their best, most practical retirement plan, ultimately helping that person live the life they want, or otherwise help them reach life’s natural compromises.


Members need help more than ever before as they address life’s tough choices. Yes, there are risks associated with doing something, but in assessing the balance of risk, surely the risk associated with doing nothing is greater, therefore impacting upon the future of your members.


Simon Chrystal
Chief Executive Officer – WPS Advisory Limited

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