T’is the season to be busy…

This is going to be an unusually busy December for financial services professionals.

First we have the gender directive with the deadline for compliance with the European Union ruling arriving in less than four weeks. Most insurers have now set out their strategy and are adjusting prices, while a few have sought an advantage by providing advisers with extensive marketing support and promising to honour cases in the pipeline.

Advisers we have talked to are also telling us that it has given them a good reason to revisit clients depending on the type of insurance and, obviously, the sex of the client.

Away from protection, men in particular need to think hard about the timing of their annuity decisions but not to think for too long because with a potential long term drop in retirement income it becomes a bad news story in only a few weeks.  Nothing concentrates minds like a deadline but businesses need to be ready for it.

But it is not just the gender directive.

At the top end of the pension and investment market, financial planning could be thrown into a turmoil by the renewed threat to higher rate tax relief on pensions. This particular relief is always on the shopping list of those politicians who believe, rightly or wrongly that the money would be spent more fairly elsewhere. This time, with the Treasury appearing to brief the Financial Times on the possibility a few weeks ago, a cut in the annual limit from £50,000 perhaps to £40,000 or £30,000 a year, looks very likely. The big issue may now be whether the Government puts any forestalling measures in place, though it is more likely that following the Chancellor’s autumn statement, there will be a ‘buy-now-while stocks last’ opportunity at least until the next budget.

The GAD limits are also proving very challenging for many investors, given the huge reduction in the income they are now allowed to drawdown. Pleas for more flexibility from the Treasury appear to have fallen on deaf ears, but it also means more work for advisers on the financial planning front and perhaps some tense discussions with clients though at least most investors seem to be blaming the government.

For those in the corporate pensions sector, work surrounding auto-enrolment will definitely increase as more and more firms get closer to their staging dates. Corporate advisers have suggested that most employers are nowhere near ready to meet their legal obligations.

Obviously, the end of next month marks the deadline for when schemes can be set up and paid for under the commission system. In January 2012 consultancy charging comes into effect, at least if it isn’t banned as well.

Given that many employers would choose the commission method of payment to meet their auto-enrolment compliance costs, rather than pay fees next year, we suspect many pension firms and pension advisers are in for a hectic few weeks.

And finally, we have the RDR with its revolution in the charging regime. Providers, fund managers, insurers and advisers are hopefully dotting ‘i’s and crossing ‘t’s but as we have noted previously in the Space 01 blog, the RDR really only goes live when it is fully introduced to clients, customers and investors.

There will inevitably be teething problems and no doubt some operational difficulties though hopefully these will be kept to a minimum. But every financial firm will be working on minimising these problems. As we said at the start, this may be the busiest December in years but we wish you all well. We suspect that all of us are going to deserve that glass of champagne in the New Year.

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