Final 5200 project: what value advice? An investigation into the role played by financial advisers and written guides in the provision of pensions in the UK.

This report describes the learning journey that has taken place and concludes with the final research project. The final project investigates the role played by Financial Advisers and written guides in the provision of pensions in the UK. It also specifically addresses the question “Does advice add value?”
The UK Government is currently embarking on the biggest change to UK pensions in 30 years.
After completing a major simplification of the pension tax regime, the Government is now introducing significant changes to the state pension arrangements, this includes the introduction of "Personal Accounts" in 2012.
Whilst state pension benefits have never been generous, the UK has traditionally benefited from a robust private pension sector but, in recent years, there has been a steady switch out of defined benefit pension schemes and into defined contribution pension schemes, especially Group Personal Pension schemes (GPP).
The new "Personal Accounts” (PAs) will be defined contribution (Money Purchase) arrangements. All employers who do not offer their staff an ‘appropriate’ pension will be obliged to automatically enrol their staff into the new PAs.
This project examines a GPP where the employer was offering membership to all staff, on a basis that was at least comparable with PAs. The employer also promoted the scheme and was genuinely keen that their staff joined the GPP. Despite this, less than 30% of the staff has done so.
The purpose of the research was therefore to see what lessons can be learnt from this experience and to understand what value financial education and ‘advice’ can add. It also examined a number of other topical issues, such as generic advice and certain Retail Distribution Review proposals.
The case study project was carried out in the first half of 2007 and consisted of in-depth interviews and the ‘testing’ of a simple guide to financial planning subjects.
Analysis and evaluation of the project results has shown that advice can add value.

Partial fulfilment of the rquirements for the degree of Doctor of professional studies.