So, I stumbled upon an article about family planning and thought, "How delightful! A plan to help the whole family thrive financially." Imagine the joy: helping kids climb the property ladder, covering wedding expenses, and ensuring parents' care costs are sorted. It all sounds so wholesome and heartwarming, right?
Enter our knight in shining armor, the pension consolidator. You see, this benevolent figure doesn't just want to manage your assets. Oh no, that would be too simple. He's eyeing up every pension pot in the family – the kids, the parents, possibly even the family pet. Where does it end? Siblings? Uncles? Aunts? Cousins twice removed?
Mr Pension Consoilidator (Mr PC), the CEO of a Pension Consolidation Company (soon to be renamed, because rebranding is apparently a hobby), had a lot to say on this topic. According to him, the financial services sector must cater to the extended family's needs. Why, you ask? Because "consumer duty" has made it necessary. Clearly, it's not about increasing profits for his company. Perish the thought!
He claims it's about a "holistic" approach. This way, even the children with £10,000 or £20,000 can get roped into this grand financial scheme. "Putting it all together and charging (a percentage of assets under management) just on that one lump sum means it's affordable for the smaller amounts of money," he says. How generous of him to make sure every little penny in the family contributes to his company's fee pool!
But wait, there's more. Pensions, he notes, represent about 40% of older people's wealth. These pensions have this magical feature: the 25% tax-free cash withdrawal. Mr PC paints a picture of pensioners generously doling out this tax-free cash to fund their children's key life moments, like first-time buyer mortgages, weddings, and nursery fees.
"Trapped wealth," he calls it, as if these funds are languishing in a dungeon, awaiting liberation by his firm. He portrays himself as the Robin Hood of the financial world, freeing pension wealth from its "trapped" state for the good of the family. Except, in this tale, Robin Hood charges a hefty management fee.
Mr PC's vision doesn't stop at pensions. He talks about "driving consolidation" and "pooling of assets," suggesting that bringing all family assets under one roof is somehow a benefit to the client. But let's be real, it's more about creating a sizeable fee-generating machine for his company.
And just when you think it couldn't get any more self-serving, Mr PC points out the tax benefits of passing down a healthy pension scheme to the next generation. Yes, it's a tax-efficient way to transfer wealth, but it's also another pot to capture, consolidate and charge fees on. We wouldn't want a pot to get away, and end up trapped again, would we?
In conclusion, while the idea of planning for the entire family's financial well-being sounds noble, let's not kid ourselves. The real motive here is clear: consolidating as many assets as possible to maximise profits for the financial services firm.
So, next time you hear about "holistic family financial planning," remember to follow the money. It's probably heading straight into the pockets of firms like Mr PC's, aka Robin Hood.
Whereas, with a financial life coach there is a wall between plan and pension pot, to ensure market integrity and eliminate conflict of interest.
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