Ed Walker:
Good morning, everybody, and welcome to our webinar today: rethinking investment partnerships. My name is Ed Walker. I’m the Head of South and Midlands Distribution at the Rathbones Group. I’m going to be the host for today, try and do my best Jeremy Paxman impression, keep us to time, but also give you some good takeaways to implement into your businesses.
Before we begin, I have to say that anything discussed today is based on our current understanding of legislation and regulation and must not be taken as any sort of advice or suitability. I’m really pleased to be hosting, and we’re going to talk about all sorts of retirement income but also, really importantly, introduce the paper in conjunction with The Lang Cat around that partnership of an investment manager and a financial planner for the decumulation or wealth decumulation phase.
We’re going to break it down into four sections today. We’ll look at some thought leadership, some regulation, some behavioral biases for you to think about, and then some solutions to implement into your businesses. Normally, when I say I have a passion for pensions, it sounds a bit strange, but in today’s audience and panel, I feel very comfortable.
I’m delighted to be joined by Ella Hugh, Director of Propositions and Service Experience at Rathbones; Mark Polson, Chief Executive and Founder of The Lang Cat; and Guy Opperman, former Pensions Minister—in fact, the longest-serving UK Pensions Minister. I’m looking forward to seeing where we go today. Lots of knowledge in the webinar, I think.
Just a couple of points: there’s a Q&A box on your right-hand side of the screen. If you have any questions throughout the webinar, please pop them in there, and we’ll do our very best to answer those at the end. If you put your name in them and we don’t get round to them, we’ll make sure you get a response.
I think it’s important to have a quick recap of how we got here. It’s been 10 years since pension freedoms. We’ve had Consumer Duty, TR241, the Pensions Bill, assessing suitability, and very recently some significant changes to planning from the budget. There’s lots going on. William Sharpe put it pretty nicely when he said that retirement income planning is the hardest, nastiest problem in finance. I was thinking about this before, and I think that’s because you as planners are trying to create a potentially fluctuating income over an unknown time horizon on a finite amount, and that’s a really tricky challenge to overcome. There are lots of risks inherent within that, so we’re going to try and unpick some of those risks.
I think a really good place to start would be with you, Mark. If you could introduce the paper and some stats, that would be brilliant.
Mark Polson:
Good morning, everybody. Thanks for joining, and thank you to all the Rathbones people for letting me come on and do this. The paper we’ve published with Rathbones will be available to you very shortly. At the heart of it, we’re trying to look at how advisers are attacking the problem Ed outlined.
Let me share a couple of stats and key findings to get us going. As a bit of framing, it’s now axiomatic that there is no single point of retirement. We asked a couple of hundred advisers what their view was, and 99% agreed that retirement is a process rather than an event. Leaves us wondering what the 1% were thinking, but there’s always one—or two in this case.
Everybody knows this isn’t a one-and-done thing. Work patterns have changed, and that’s useful because it’s a strong foundation from which to build. Worth mentioning as well: when we look at the point at which that process starts, for many people now it’s often involuntary and not always from a position of strength. We may have to plan for 40 years of what to do with that money, and there’s always the danger, as one respondent said, of “too much life at the end of the money.” We’ve got to be really careful with that, and it’s awfully easy to get these things just a little bit wrong.
One of the findings from the consumer side is that roughly three-quarters of UK adults have done no retirement planning at all. That doesn’t mean there’s no money there—they may well have accumulated some—but in terms of actual planning, the kind of stuff you’d recognize as working out goals, fitting money into those goals, and identifying gaps, about three-quarters haven’t done any of that. That includes some people who’ve accumulated pension wealth.
We also live in a much more individualized system now. Most of us don’t have the pleasure of trustees looking after us as they might have done in DB schemes. And only about 9% of the UK population can avail themselves of financial planning. So lots to think about.
Jumping to specifics for advisers: a big thing happened last year. Outsourced investment propositions—centralized investment propositions, the outsourced flavor—became the number one way planners and advisers ran money. For the first time in 2024, that beat advisers running it themselves. People are outsourcing more than insourcing now. That’s locked in and really important because it speaks to key challenges: what are you here for? What’s your job? Do you want to do planning? Do you want to do investment management? You can do both, but each is a serious undertaking, particularly in an income withdrawal situation.
Only about a third of advisers we spoke to think the retirement income supply side—the product space, the solutions you can use—is sophisticated enough. More than half believe outsourcing to enable more time for planning is optimal. About the same proportion say the gold standard is an adviser doing the planning and an investment manager—maybe Rathbones—doing the investment management. Render unto Caesar the things that are Caesar’s; let the experts do what they do.
The way the industry has developed doesn’t easily allow for the level of individualization most planners believe is essential. That’s it for me.
Ed Walker:
Thanks, Mark. That gives a really good overview. The time element is massive, isn’t it—giving advisers time back to see clients or do what they enjoy. Guy, can I come to you on that? Why do you think it’s important for us to help advisers in this space?
Guy Opperman:
If I go back to 2010 when I first got into parliament, there was no DC, no pension freedoms, no Consumer Duty, no Pension Wise, no MoneyHelper. The world has changed dramatically in the last 15 years—and even more in the last five. We now face a population where 60 is the new 50, 70 is the new 60. People have totally different needs at 68 than at 78, 88, and potentially 98. Planning is utterly different for each five- to ten-year cohort.
The report is very helpful and timely. Mark is right to highlight the points he does. The brave new world is going to be way more individual because you need to assess and understand each client’s needs as they go forward. The old days of a once-and-done approach to retirement solutions are gone. You need an individual bespoke solution for each client. This report talks about that. We’ll get into outsourcing and maybe even use the word decumulation—which I introduced as minister—but bluntly, this is a positive step in the right direction.
Ed Walker:
Brilliant. Thanks, Guy. Ella, why did Rathbones think it was necessary to do this research?
Ella Hugh:
Firstly, it’s really important to me and to Rathbones that we provide practical support for advisers. There’s a myriad of information out there, and what Mark and the team have done is bring a lot of that together, give deep insights, and provoke thought. It was about bringing together critical points that are helpful to advisers and their teams.
Ed Walker:
Thanks, Ella. Mark, what was the most surprising statistic in the report?
Mark Polson:
Probably that a third of firms don’t think the options available to them are sufficiently sophisticated. I’m surprised more didn’t say that. We’ve created relatively simple solutions that are brilliant for accumulation, but maybe not optimal for the last 30 to 40 years of life. Most advisers don’t fundamentally change the investment proposition as clients age—they may derisk slightly or keep more in cash, but that’s it. The argument back is that structures aren’t there. We’re not feeling the demographics yet because DB is still prevalent, but soon people will arrive with just a pot and the state pension. These decisions will become critical.
Ed Walker:
Thanks, Mark. Guy, could you give your view on the intent and outcome of regulation like Consumer Duty?
Guy Opperman:
We want individuals to take responsibility for their savings. DB is long gone. DC started in 2012. Australia started in 1992 and has no DB. Look at Australia for what the future looks like. Government has tried to help with Pension Wise and MoneyHelper, but Consumer Duty is about making things simple. Historically, we served the industry, not the customer. We want simple, comprehensible communication and value for money.
Ella Hugh:
As a provider, we have a responsibility to simplify and make it easy for advisers and clients. We expect greater simplification of regulation moving forward. Your average Joe doesn’t understand most investment terminology. The simpler we make it, the easier we make the adviser’s job.
Mark Polson:
The industry has outsourced caring about individuals to advisers for decades. Consumer Duty is more profoundly baked in than previous regulation. Providers need to stop hiding behind regulation. Most regulation says: say the right things in a way people can understand. Clarity isn’t brevity—explaining in layman’s terms often takes more words. Maybe the way we help people understand needs to evolve.
Guy Opperman:
I agree. When I became pensions minister, I asked why we have a thing called auto-enrolled defined contribution pension. If I walked into a pub and asked who has one, blank faces. Australians know they have a superannuation. Consumer Duty can be reduced to ten words: simple comms, value-for-money products for their needs and support.
Ella Hugh:
Advisers have been interpreters of regulation for a long time. Emotional intelligence is key. Retirement is a huge leap. Understanding the client and moving with them is critical. It’s not a point in time; it evolves.
Mark Polson:
The industry gets confused about what planners do. Most of a retirement review is about goals, aspirations, health, family—not products. The moment the client meets the industry is difficult. Consolidating pensions ruins the experience. Planning is a premium service, and not everyone can afford it. Planners will be fine, but the industry needs to do better.
Guy Opperman:
Australia is great at accumulation but poor at decumulation. Many retirees die with their full pot. We need structured payments throughout retirement. The earlier you intervene—age 45 to 50—the more time you have to make a difference. Midlife assessments are gaining traction.
Mark Polson:
Empathy and technical skills remain vital, but specialization will define success. Everything is complex and interconnected. Portfolio construction, technology integration—these are specialisms. Outsourcing will become more prevalent.
Guy Opperman:
Complexity is increasing. Healthy life expectancy matters. You’re structuring products for people who may live to 98 or 100. Cognitive decline adds another layer—dementia, Alzheimer’s. How do you make decisions for someone without capacity? Planners are at the center of this, navigating stakeholders in highly emotive situations.
Ella Hugh:
Care homes aren’t cheap. Making money last is critical. Partnership between planner and investment manager is key.
Mark Polson:
Specialization again. Later-life planning will be a fantastic career path. It’s not going away.
Ella Hugh:
At Rathbones, we pride ourselves on partnering with financial planners to execute portfolios that work for clients’ differing circumstances. Longevity risk is growing. In the new year, we’ll launch a personal solution for the adviser market—tailored, scalable, and easy to implement. We want to make doing business simple and deliver on what we promise.
Ed Walker:
Thank you, Ella. Let’s take a question for Guy. Recent budget changes have eroded trust. How do we regain it?
Guy Opperman:
Anytime you mention pensions and tax, it’s negative. Salary sacrifice changes are four years away. I’ll believe it when it happens.
Ed Walker:
Mark, any final thoughts?
Mark Polson:
Be alert. New solutions are coming. Technology can deliver personalization at scale, but it’s hard and must be done well. Don’t forget: the moment when the door closes and it’s just you and the client remains central.
Ed Walker:
Thank you, Mark, Guy, and Ella. As a reminder, we specialize in this space. We have investment managers and business development directors who understand the regulations. We want to create personalized services for your clients and provide stability of income over the long term. We have lots of resources available at Rathbones Group, including a retirement hub. We also did a budget webinar last week, which Guy presented. On behalf of everyone at Rathbones, thank you for your support and have a lovely Christmas.
