Setting the record straight, with John Warburton, Executive Director, Distribution, Prudential

We face a ‘new paradigm’ for financial planning and retirement provision, according to Prudential’s executive director, distribution, John Warburton, who believes George Osborne’s Budget announcements very much suit the insurance giant over the medium to long term.

“Our priority this year is to continue developing our product propositions even further in response to those [Budget] changes so that we can give advisers a wider range of flexible solutions that suit the post-April 2015 world.

“You shouldn’t see any major change in strategy or direction from Prudential to that which had already led to our strong performance – focusing on providing risk-managed solutions that give customers choice when it comes to them drawing their income for retirement.”

Warburton says the group has done this by focusing on its core assets – the Prudential brand, its financial strength and a multi-asset investment capability that holds risk management at its core.

“We have always based our product range around providing guarantees and longevity risk management. The new freedom and flexibility that the Budget introduced means our approach has never been more appropriate,” he adds.

Warburton foresees an escalating level of product innovation across the industry – due in part to the Budget but also in response to a growing demand for more flexible financial planning and at-retirement solutions.

He says the advent of the New ISA (or Nisa) together with drawdown products will become more attractive as demand from consumers and advisers grows, while the need for alternatives to annuities will drive innovation – both from Prudential and the broader industry.

Advisers can feel reassured they will receive the same level of dedicated support when navigating the inevitable industry changes that the Budget will spur, as they received during their RDR journey.

“We felt we were particularly successful at supporting advisers around the RDR and the feedback we have had echoes this. We invested a lot of time and effort in supporting them through that level of change and we would expect to deploy the same level of resources in this instance, leveraging our capabilities to help advisers.”

He says the extensive programme of training and information – available largely through its adviser extranet – ensures that from a technical perspective and through its scenario-based modelling tools, advisers should be suitably armed to face the changing distribution landscape. This is also underpinned by Prudential’s account management, business development and business consultancy services that are available to financial advisers.

Warburton stands by the company’s decision not to invest in its own fund platform, failing to see a viable business case at this point. Rather, he urges advisers to ‘watch this space’ for wider availability of Pru’s multi-asset investment propositions, as they are listed on more third party platforms over the second half of the year.

Warburton says the new world should be viewed as a broader opportunity set for an adviser rather than posing a threat.

“We are very bullish about the adviser market in general, witnessing a transfer of responsibility from the state and employers to the individual taking on a greater responsibility for their own long-term financial needs, and taking on more risk to their own personal balance sheets,” he adds.

Even against a backdrop of increased direct-to-consumer activity and a potentially more complex distribution landscape for advisers to wade through, Warburton feels strongly that a greater financial awareness will only help grow “the overall size of the advice market”.

“Our expectation is that, as levels of consumer understanding of the challenges they face rise, and their interest and awareness is piqued, what will really be needed and valued is full professional financial planning.”

Sam Shaw, Freelance Journalist

fca attempts to regulate the internet

The FCA has produced a consultation paper regarding its intent to impose rules on firms use of social media and customer communications. It is an interesting, and as usual dry, slightly confusing and condescending read.

Ahead of the curve, in June 2014, Panacea Adviser produced a free guide to Using Social Media Successfully, which also included direction from a compliance perspective and vitally, it was very easy to understand. A copy has been forwarded to the FCA. You can download a copy too.

The FCA paper could be summed up in the style of my end of term school reports that used to read “could try harder”“seems to have trouble grasping the subject” or “lacks perspective in key areas”.

I shudder to think what this venture into cyberspace has cost so far, let alone what it will cost.

We exchanged a few tweets with them on the matter, the thing with tweets is that they are there to allow some thought exchanges, ‘Tweeter etiquette’ dictates you should always respond as that helps with understandings.

Here is the only one they responded to:


: Being a follower of a firm on Twitter or liking a firm’s FB page doesn’t constitute ‘an established existing client relationship’ #smfca

11:35am, Aug 06 from Twitter Web Client


: @TheFCA net neutrality rules were also designed to allow the freedom to innovate without permission, a bit of a minefield you are creating?

11:55am, Aug 06 from Hootsuite


: @PanaceaAdviser we’re keen not to prevent innovation but need to make sure all financial promotions are compliant

3:23pm, Aug 06 from Twitter Web Client

Clive Adamson the FCA Director of Supervision (yes that Clive Adamson) said, “The FCA sees positive benefits from using social media but there has to be an element of compliance.

But what is an element of compliance? With a regulator there is no known measure or metric for ‘element’ until after the event.

Section 2 of their paper regarding the FCA supervisory approach starts with a definition of what are (not is) social media and has chosen a non-social media source as its reference point- the Oxford Dictionary 2013. “Social media share the characteristic of being digital and can be defined as ‘websites and applications that enable users to create and share content or participate in social networking”

Now if we were to use the more web relevant on-line source Wikipedia, the definition of Social media is “the social interaction among people in which they create, share or exchange information and ideas in virtual communitiesand networks”.

Wikipedia goes on to say that “Social media differs from traditional or industrial media in many ways, including quality, reach frequency, usability, immediacy, and permanence”.

The FCA produced a “non-exhaustive” list of social media classifications to include blogs, micro blogs (Twitter), social networks (Facebook, LinkedIn etc) forums and image or video sharing platforms like YouTube.

Wikipedia covers off the above too, but a little more richly noting that social network aggregation can integrate many of the platforms in use.

They go on to observe that “the boundaries between the different types have become increasingly blurred arguing that Twitter, as a combination of broadcasting service and social network, now classes as a “social broadcasting technology“.

The paper seems to ignore the various forms of social media and technology engagement habits of users. It makes no mention of business potential from managing and harvesting data from social media or ‘building social authority’ aka ‘vanity building’.

Clive Adamson went on to say, “We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media”.

Having been told by a number of influential financial services ’Tweeters’ (identified from our recent ‘Top Tweeter’ awards winners)  that they had not been consulted, Panacea Adviser has submitted an FCA FOI request as we would like to know more around who or what exactly “extensive industry engagement” represents. We have requested some clarification asking:

Who exactly have the FCA had “extensive industry engagement” with?

What is their level of Social Media knowledge, influence and expertise?

What is the FCA’s understanding of how a financial adviser would use Social Media based upon to produce this proposed guidance?

The FCA has a problem, as it seems to be trying to re-invent the wheel and Highway Code at the same time to control a vehicle that no longer has wheels, or is powered by petrol derivatives and that can, using technology, control and navigate itself quite responsibly indeed.

Some facts for the FCA to digest before they attempt to impose regulation where in many cases a simple application of common sense and a bit of caveat emptor would do the job just as well and at much lower cost.

Businesses building a significant following on social media are in fact creating their own publishing platforms, like us at Panacea, growing their channels of influence and content distribution networks.

They are creating a huge digital asset that grows every year in size and most importantly in value*.

Over time their investment in social media can provide huge opportunities for their clients and marketing independence if done right.

So with that in mind the FCA should have a look at some major social media metrics at the start of 2014.

Social media is simply a “blur of tweets, shares and content”. No longer is it just used by the young and those with little else to do. It is global and embedded in every corner of the web.

And above all, no matter how they may try, it cannot be regulated in the way the FCA would wish.

Some basic facts:

  1. 72% of all internet users are now active on social media
  2. 18-29 year olds have an 89% usage
  3. The 30-49 age group have 72% usage
  4. 60 percent of 50 to 60 year olds are active on social media
  5. In the 65 plus bracket, 43% are using social media
  6. Here are the top 3 countries for time spent on Facebook per hour online:

USA 16 minutes,

Australia 14 minutes

UK at 13 minutes.

  1. Some 71% of users access social media from a mobile device.

Twitter is the fastest growing social networking service seeing 44% growth in 2013, Google+ grew 33% in the same period, Facebook has 1.15bn monthly active users, Twitter 215m and the average time spent online with social media networks is 13 minutes per hour in the UK.

The Internet ethos was not and is not about control and regulation. It is global, operates, 24 hours a day and like the ‘Curates Egg’ is good in parts. It does not react well to phrases like “within our regime” or “standalone compliance”.

Isaac Newton said “I can calculate the motion of heavenly bodies, but not the madness of people”. The regulatory emphasis should be on the appropriateness of advice given, not a 140 character tweet that may have led to that process.

And the FCA wants to control this?

I would suggest they look at an easier and far lower cost opportunity, the banks?

*Information sources:





Take That!

Who’s been a naughty boy then?

Gary Barlow is the latest potential gong returnee joining an ever lengthening line of celebrity ‘victims’ being hung out to dry for ‘sins various’, all determined by a baying social media fuelled mob and on this occasion under the direction of one Margaret Hodge MP, that self proclaimed leader of the tax paying great and the good.

Yes, that same multi-millionaire former Labour minister Margaret Hodge, who faced questions in November 2010 over the limited tax paid by Stemcor, the steel trading company of which she is a shareholder and which was founded by her father and is run by her brother.

Analysis of Stemcor’s accounts by the Daily Telegraph in their edition of 10thNovember 2012 reported that the business paid tax of just £163,000 on revenues of more than £2.1billion in 2011.

There is a growing trend in UKplc for the so-called ‘vulnerable’ and dispossessed social minority to exert undemocratic control over the enfranchised majority. It would seem that to get your voice heard and action taken today you should belong to a minority group of some sort, preferably with questionable ethnic, religious or ethical agendas ideally funded with government grants.

What did Gary do?

He and other bandmates invested in 2012, it is alleged, at least £26 million in what was referred to as an ‘aggressive tax avoidance scheme’, putting money into two partnerships, run by Icebreaker Management, styled as music-industry investment schemes, according to reports.

Judge Bishopp, in a High Court ruling, declared that the partnerships set up by Icebreaker Management were to secure tax relief for members, and HMRC is now expected to demand repayment.

Take That’s lawyers insisted the band mates believed the investments were legitimate enterprises and that all four named paid “significant tax”.

Most wealthy individuals got to be just that with a little talent, some good luck and an awful lot of specialist professional support looking for the best ways to secure and grow their wealth, no matter how it was obtained.

Mr. Barlow is, I suspect, only guilty of taking financial advice to best invest his millions and avoidance, no matter how aggressive is not illegal.

Let’s keep an eye on FSCS defaults in the coming months if his financial adviser finds him or herself in the firing line from Mr. B’s legal team.

I think there are plenty of others who should be higher up the ‘Return your gong’ list; perhaps you would like to suggest some.

Shall we start with Sir Hector?

What goes around as they say………

Time for a socio rethink

‘Fifty shades’ author E L James said, “Language evolves and moves on. It is an organic thing. It is not stuck in an ivory tower, hung with expensive works of art and overlooking most of Seattle with a helipad stuck on its roof.”

But language shapes the way we think, and now actually determines what we can think about, what is socially correct to think about.

In an increasingly politically correct world, where a new form of self righteous ‘Puritanism’ seemingly reigns supreme, language has taken a totally new direction in describing many things that previously had a particularly clear understanding as being something else, encouraging some form of self serving, hand wringing, soul cleansing, social inclusion that absolves society of blame or stigmatisation whilst simultaneously removing or erasing common sense, liability, responsibility, guilt and reason from the supposed victim.

The English language today is being highjacked by some crazy variations of evolution.

According to new ‘diversity’ guidelines, normal persons in the presence of people with disabilities should not be referred to as ‘normal’ but rather non-disabled persons. Clumsy individuals are now called “Uniquely coordinated”, if lazy you are now called “Motivationally deficient”, if you spend spend spend you are now a “Negative saver” and if you are one of life’s failures, in addition to being called vulnerable you are now deemed to have “Achieved a deficiency”.

If you are Gwyneth Paltrow and Chris Martin you do not split up, you have a “Conscious Uncoupling”.

Public facing governmental offices and hospitals now have ‘clients’ AND we now no longer have customers- we have consumers’. Grrrrr

I have become increasing concerned about the prevalence of the term ‘vulnerable’. It seems that in today’s touchy feely, oh so caring society, the term has become overused to the point that it is now meaningless.

There is not a day that passes where you will not read or hear the word. The BBC is particularly adept at its misuse, regulators, civil servants and politicians likewise.

Vulnerable as an adjective is described in the Oxford dictionary as “exposed to the possibility of being attacked or harmed, either physically or emotionally”. A thesaurus throws up many other words like exposed, sensitive and defenceless.

In our industry the vision regulators want the word conjuring up is meant to display advisers’ clients as under ‘fiscal attack’ from unscrupulous and uncaring firms.

What is your view of a vulnerable person?

Is it determined by physical or mental disability? Is it financially related?

Vulnerable is now used as a noun to describe or quantify a social collective, in this case the collective has been formed by way of being seen to be someone cast aside by society, a victim not responsible for their plight and dependent upon someone, anyone, coming along to reset the counter to zero so that they can do it all over again.

Vulnerable in many cases today is now used to describe someone who previously was known as simple, stupid, irresponsible, reckless, dangerous, a scourge on society and in doing so the truly vulnerable are done a great disservice.

Regulators are very fond of claiming that “vulnerable consumers” must be protected. A very good example of this is the latest FCA thinking on “Debt management firms selling ‘unsuitable’ plans”.

We are now looking at the very real possibility of regulation actively protecting people from their own stupidity. That is not a regulatory mandate yet we seem to be powerless to stop it. It is another way of unaccountable bodies generating work to justify their own existence instead of doing what it says on the can.

The FCA is the Financial Conduct Authority; it is not the Feckless Cuddling Authority.

In many cases these will be the same ‘vulnerable’ people who avoid the FOS and go to CMC’s in pursuit of a fast buck. After all where there is stupidity there is a stash of cash- for someone, although it is often the case that the stash is for the lawyers as they prey by statute on the vulnerable rather than protect.

So let’s have a rethink FCA, BBC, Parliament. Vulnerable is that person in a wheelchair, that person who cannot move, see, hear, walk, talk, and feel and is truly reliant on someone else to care for them.

It is not someone who was previously known in a different socio economic time as a waste of space and should be avoided at all costs.

Next week I get started on ‘hard working families’.

Visit for more or Listen to the audio of this article

Stupid is as stupid does

“Pensioners should be trusted to use their retirement savings however they want”.

I must confess to being a little annoyed at what many saw as a condescending remark from pensions minister Steve Webb.

This was from the same vein of political wisdom that stretches back to John Gummer, now Lord Debben (yes, the APFA chairman) and his ‘beef burger’ moment.

There is no doubt that this creates the opportunity for more people to make better informed retirement choice and it is also an opportunity for financial advisers to demonstrate value to potential annuitants.

But I do not see this as being the intention.

Firstly, regulation today is based it would seem, upon consumers being protected at all costs from themselves, irrespective of advice given, irrespective of changed circumstances, irrespective of changes goals or aspirations.

In light of this it seems a complete about turn (from a government that mandated the FCA) to now suggest that “Pensioners should be trusted to use their retirement savings however they want”.

This is not about a generous and thoughtful government empowering the ‘silver surfers. This is a tax grab, a way of the government ensuring that the aged consumer, previously known as a vulnerable consumer, can now ensure that an advance on IHT can be made before they die to reduce the national debt and provide funding for third world aid programmes and more unmandated social engineering and politically correct projects before the next election.

Based on the understanding that after the 25% tax-free cash withdrawal the balance, when taken, will be subject to marginal taxation, pots big and small could find themselves being taxed on that hastily drawn down balance if they decide to take the money and run rather than take independent advice and hold fire.

We should also be in no doubt that the meager savings of many or the substantial savings of the elderly generation in whatever form have been subject to vicious fiscal attack from governments over the last 20 years or so.

Pension funds raided by Gordon Brown, caps put on the size of pension pots, tax then put on top at the highest rate, tax relief limits reduced and so on.

At the same time, governments have then decided that the villains of the piece are financial institutions and the advisory community for charging too much, being unfair, not being flexible…. the list I guess is endless.

Governments have a difficult time I balancing the books, especially in a coalition government. After all as Donald Rumsfeld once said “If you try to please everybody, somebody’s not going to like it.”

In this case what I am getting concerned about is that this industry is seen as the ‘whipping boy’ when in reality much of the problems that savers, pensioners and taxpayers endure are as a direct result of poor government, poor regulation and distinct lack of political foresight and common sense.

Bubba may know everything there is to know about the “shrimpin’ business”, but Steve Webb knows nothing about anything it would seem.

Panacea launches all new auto-enrolment microsite

New rules and regulations, which are frequently introduced to the adviser world, are often fraught with difficulties and can take an awful lot of your time to understand and act upon accordingly.

Naturally, time is money to firms, more so than ever in todays fee charging world. And that loss of time linked to a failure to understand either the regulatory direction or opportunity can manifest itself in a reduction of income.

However, the new pension reforms are providing advisers with some great opportunities for additional revenue streams in the shape of auto-enrolment.

To assist you in taking full advantage of this opportunity, the Panacea Auto-enrolment micro site has been designed with input from providers, advisers and support services to promote an understanding of what you need to ensure the ongoing success of your business in light of what the changes to pension reforms present.

It is designed to help advisers support their clients in the run up to staging dates over the next three years and will assist in identifying business opportunities in the shape of step-by-step guide so you can conduct auto-enrolment business to ensure continued profitability.

This free to use resource also includes all the latest news on auto-enrolment, legal requirements and a whole raft of useful links.

And of course more useful tools and information will be added over the coming months.

So take a look today, bookmark this invaluable resource, let us know what else you would like to see and from who. And above all let your colleagues know today.

A Panacea for Paraplanners

As we have settled into the new world, with greater regulation surrounding documentation and accountability, paraplanners have played an increasingly important part in supporting the service offered by advisers. In recognition of this, we are delighted to announce the launch of a dedicated microsite for paraplanners.

Designed in conjunction with providers, paraplanners and support services, the new Paraplanner microsite ensures existing planners, as well as those new to the industry have easy and fast access to the tools and information they need.

This new site offers a range of articles, services and tools designed specifically to assist with a paraplanner’s day-to-day role and includes technical information and learning materials to help with their professional development.

We are confident this site will be popular with our ever-expanding number of paraplanning users so please pass this on to your paraplanner colleagues as we believe that this, in turn, will provide further support to our adviser community.

For more information please visit

Cows will teach you a lot about human behaviour



You can learn a lot from animals, particularly their character, moods, idiosyncrasies, and the way they respond to the world especially in a group.

Cows are great studies of human behaviour.

Growing up on a dairy farm was a great study in all sorts of behaviours, I just didn’t know it at the time. When you spend a lot of time with cows [and a dairy farm has you do that] you get to know most of the herd pretty well.

You see them twice a day everyday of the year. We milked for town supply so every day was the same routine. 4 o’clock in the morning, when your alarm would go off to get up and going, and 4 o’clock in the afternoon when milking would be starting.

We, like the cows, had an inbuilt clock that had us heading for the milking shed, almost on autopilot.

You’d get to know the cows and their personalities. Those that were docile and amiable, those with a sense of frivolity, those that were loners and those who were leaders.

Twice a day, every day for most of their adult life, they would enter the yard at the cowshed with the other 250 odd cows and go through exactly the same process. Being intelligent animals and quick to learn, they knew all about what milking entailed.

72 was not a pretty cow, not by Friesian standards. She didn’t have that handsome black and white coat that is so synonymous with Friesians, and most of the rest of the herd. Hers was a muddy brindle and black colour.

Perhaps it was professional jealousy, perhaps she was bullied by the others, perhaps she had no friends, but there was one consistent thing you could count on—her belligerent attitude.

Her demeanour, her stance, behaviour, attitude when milking; she just disliked the world and was happy that everyone should know. When milking, she would stand with her head down, ears back tail swishing vigorously, trying to catch any poor unsuspecting human who wasn’t watching, across the face.

And she would kick four or five times like clockwork. Once when you washed her, once when you started her [ready for milking], once when you put the milking cups on and once when you took them off. Often for good measure she’d kick them off in the midst of milking as well.

You knew and would watch out for her. Only if you were particularly tired or not concentrating would you get caught. In the middle of winter, with a substantial frost on the ground and wet hands, your fingers felt like tender little numb stubs on the end of your hands. Collecting a hoof right across your fingers would hurt, a lot, and remind you that you should have been paying more attention.

Why was 72 always like that? I never studied cow psychology but she just didn’t like the world. So, what for many cows was merely a routine part of life was for her a constant reminder of her need to rage against bovine oppression.

I’ve met clients like 72.

You can look at their situation and in a few minutes sum up the numbers and work out the issues. Financially everything should be working well, but it’s not. And the reasons are clear.

The challenge is getting acceptance that the numbers are telling a story and that what is required is not a new and sexy investment program, nor an app for their smart phone. What is required is to acknowledge that there is little or no connection between money coming into the household and what’s going out. Cashflow.

It’s as plain as day, but goes totally unrecognised.

And this behaviour may be decades old. Just like 72 that’s the way it is. More to the point that’s the view from where they stand and it’s normal.

So apart from stating the ‘bleeding’ obvious—what is the resolution?

In the face of facts they will state the need to invest, get better rates, get a salary increase. The reality is they need to watch what goes out of the house. Actually take some notice and manage it better. When we’ve helped them do that successfully, then and only then will they have the platform on which to build everything else. Failure to that will build a house of cards that will fall over, as it often has several times before. Until then it will be another year of the same old outcome.

So why do people choose to ignore that facts and do the same things over and over and expect a different result?

I don’t know, I never studied cow psychology.

Rex Wood Director

Iridium Financial Services

Sydney, Australia

Iridium Financial Services works exclusively with people between 40 and 50 who have been earning pretty good money, but realise that their net worth doesn’t reflect the amount of money they’ve earned or the hard work they’ve put in over the last 20 years or so.
They feel like they’re falling behind and want to catch up, before it’s too late