The tail end of a Government at a time where there is a real prospect of a new party taking over was always going to be interesting, and so it is proving. Over the last 12 years we have got used to things staying as they are, and where change does happen, it has been brought about by means of glacially slow consultation.
The prospect of a change of management at Number 10 means many corners of the industry are engaged in bolder thinking
But the prospect of a change of management at Number 10 means many corners of the industry are engaged in bolder thinking than has been the case for some time. This in turn is leading to bolder talk.
The Retail Distribution Review is one such area. Providers, Standard Life in particular, seem comfortable openly flaunting the powerlessness of the FSA over the occupational pensions arena. The FSA wants its RDR principles to extend to trust-based schemes but emboldened providers understand that it has no jurisdiction to make it happen. Whether TPR will step in and regulate the area remains to be seen, but it appears that primary legislation would be necessary. This impotence must be all the more telling for the FSA bearing in mind the fact that the Conservatives say they want to abolish anyway.
Those engaged in the delivery of personal accounts, whether within Pada and the DWP, or in private sector responses to the project, may also be wondering whether their endeavours will see the light of day. The Conservatives have not said they want to get rid of personal accounts. But if Whitehall turns blue next may, the life insurance industry will be impressing on ministers the benefits of using existing providers to administer personal accounts. Chief amongst these benefits will be the idea that private sector providers can be blamed if it all goes wrong. Nigel Waterson, the Tory pensions shadow, has said he wants to avoid a Terminal 5 moment. He doubtless wants to avoid a Child Support Agency moment too.
It remains to be seen how serious the Conservatives are about the alternatives, and how attractive the life industry’s plan B will prove.
But despite all this confusion, I get the distinct impression that corporate intermediaries feel their business models are back on track. That there will be some form of enforced saving introduced at some stage seems without doubt. And at the Corporate Adviser DC Summit last month a massive 96 per cent of delegates, constituting more than 30 of the largest intermediaries in workplace benefits, said they expected pension reforms to increase their business.
Old loyalties are being exchanged for new ones as the industry senses an impending seismic shift in power – we are in for interesting times.
John Greenwood, Editor
john.greenwood@centaur.co.uk