There were no major surprises in this year’s Autumn Statement which are significant for our clients and prospective clients in general.
The various changes in tax that were announced were, as is often the case, simply confirmation of announcements previously made. This is even the case with tax avoidance measures, for example the move to restrict the tax benefits of salary sacrifice schemes (and the fact that this restriction will not apply to salary sacrifice for pension contributions).
Those of our clients who focus on property investment may find the screw has been turned further on the profitability of their business. Initiatives over the past year or so have made residential property investment less profitable. Now it is intended that letting agencies will no longer be allowed to charge fees to tenants, landlords may find they will have to pay higher fees to those agencies.
Over the weekend there was a lot of press talk about the proposed curb on cold calls to promote pension reviews. Those who believe what they read in the papers were expecting an announcement of measures to ban this kind of cold calling, perhaps even extended to cold calling relating to any kind of investment.
In the event, what we got was an announced “consultation on options to tackle pension scams”.
We should all welcome such a consultation. Most of us have probably come across clients who have encountered pension scammers. If we and the government can, between us, find a way to make it more difficult for these scammers to operate, then this will be a good thing. When the consultation begins, we should be ready to join in and express our views.
We applaud legitimate, regulated advisers who wish to encourage prospective clients to review their pension investments, make sure their asset allocation is appropriate to their attitude to risk and capacity for loss, and make sure the charges they are paying are not unnecessarily high. Just as very few clients unilaterally decide they would like to buy life insurance, very few decide to review their pension investments unless they are given a hard prod to do so.
If the pension investors who have been conned by scammers into making inappropriate investments had met with and retained a good financial adviser it is most unlikely they would have been hoodwinked in this way. It is incumbent on us as professional advisers to get in front of as many people as we can and try to ensure they are properly looked after and do not fall into the hands of the scammers.
Cold calling to promote investments, whether or not these are within pensions, is already very highly regulated. Responsible organizations such as Adviser Breakthrough have always ensured they operate legally and ethically in this area. We, and the advisers we serve, provide a very necessary and valuable service to the many ordinary people who have not been properly advised on their pensions and other investments. Far too many are not getting proper returns and desperately need the advice good financial advisers can give them.
It is therefore refreshing to see the Chancellor is not simply planning to stop advisers contacting new prospective clients, and pretending that in some way this will stop the pensions scammers in their tracks.
In future we will no longer have a Spring Budget and an Autumn Statement. Instead we will have an Autumn Budget and a Spring Statement!
This may sound amusing, but there is a clear move to focus all the changes in the Budget rather than the Statement. The Chancellor is keeping his options open to make some changes in the Statement, but has made clear he only intends to do so if absolutely necessary. We will follow suit, and do not intend to send out a review of future Statements unless specific matters arise which should be of concern to us and our clients.
Next year, of course, there will be a Spring Budget and an Autumn Budget, so be prepared to receive updates from us on both.