The FCA has just announced it intends to consult on a ban on contingent charging on pension transfer reviews. Earlier this year Money Alive was the first to respond to the Work & Pensions Committee enquiry on contingent charging. We explained to MP’s how we think that, by using the Adviser Portal, advisers can make contingent charging redundant. Our response:

Written evidence from Money Alive Limited (CSF0001)

Further to your enquiry please find our submission regarding how, by using a proven, reliable and scalable piece of technology, the practise of contingent charging can be avoided:

Money Alive, a RegTech company based in York, launched ‘The Adviser Portal’ in January 2018. Using the Adviser Portal Pension Transfer Specialists can give enquirers engaging and impartial information on the implications of staying in/transferring out of a DB scheme before the enquirer engages the adviser for a full review (and associated charge).

Here is how it works:

  1. Following an enquiry from a person wishing to have their safeguarded benefits reviewed the adviser sends the enquirer a unique link to an impartial, interactive educational video journey (generated and delivered by their Adviser Portal).

  2. The enquirer clicks on the link and this opens up the engaging, Pensions Management Institute accredited, video journey delivered in 17 short chapters. (Total run time shorter than one episode of Strictly Come Dancing).

  3. As the enquirer goes through the chapters they are asked to confirm their understanding of a subject or, if they don’t understand something, type a question, which is shared with the adviser’s Portal dashboard and which can be discussed at a subsequent meeting (if the enquirer decides to proceed with a full review).

On completion of the video journey the enquirer has a good understanding of the benefits of a DB scheme, the risks of transferring and is aware of important factors such as how it can affect dependants, taxation and the risk of scams. The enquirer can then make an informed choice as to whether to pay for a full review or “filter themselves out” (to use an FCA triage term) and avoid review costs.

No contingent charging required!

The Adviser Portal was launched in January 2018 and to date, it has been used by advisers to deliver around 2,000 video journeys to clients. Because of the engaging qualities of the videos (following extensive research) we have achieved a very high persistency rate through the video journey – currently around 83%. January 2019

–SUBMISSION ENDS–

A great deal has happened since we submitted this back in January 2019. As well as educating clients the Adviser Portal’s risk management and time saving qualities are being increasingly valued by advisers and we’re now up to over 5,000 journeys (comprising over 60,000 video views).

If you’d like to read all the responses to the Work & Pensions Committee please use the following link: https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/inquiry13/publications/

Finally, one of our adviser clients was interviewed recently by FT Adviser to discuss how technology impacted on their advice process. If you have 4 mins please feel free to see what our clients think of Money Alive: https://www.ftadviser.com/pensions/2019/07/12/technology-should-be-embraced-rather-than-feared/