A client is approaching retirement with several pensions. Bringing them together would make withdrawals easier to manage, but one existing plan has competitive charges and features worth keeping. The adviser has a preferred approach and sound reasons for it. The research supports much of their thinking, although there is still a decision to work through.

This is where a conversation between experienced colleagues earns its time. Both approaches have merit. The task is to establish which benefits matter enough to this client to justify the compromises involved.

The advisers we work with value having someone to explore that with. They bring their understanding of the client and explain how they have reached their view. We examine the arrangements in detail, investigate the alternatives and talk through what the findings mean for the recommendation. Often, the most useful part is a discussion about something neither a comparison table nor a product description can settle.

 

What does simpler mean for this client?

In the pension example, “easier to manage” needs some context. A client who is comfortable dealing with several providers has different priorities from someone who finds the paperwork overwhelming. There is also a difference between wanting a tidier annual statement and needing a withdrawal arrangement that the client and their partner can manage confidently throughout retirement.

The research can then test whether keeping the low-charge plan and consolidating the others would provide the practical benefits the client needs, while preserving features worth retaining. That means comparing the costs, benefits and options before combining pensions, including whether a partial consolidation would serve the client better than a full move or leaving the arrangements as they are.

Two clients with similar pension values, retirement dates and attitudes to risk can reasonably receive different recommendations. The explanation needs to show which circumstances tipped the balance.

 

What would make us favour the alternative?

Once an approach looks sensible, it is easy to concentrate on developing it. There are illustrations to obtain, calculations to complete and practical details to confirm. Before getting too far into that work, I find it useful to ask what would make the other option preferable.

Take a client attracted to flexible withdrawals who expects to take the same income every month. Flexibility could still matter, particularly for future expenditure or changes in circumstances. But its value needs exploring before it becomes a central reason for recommending a more expensive arrangement. If the client has no foreseeable need to vary withdrawals, that deserves a place in the discussion.

Working through that point helps establish how much weight the feature should carry. It can strengthen the original recommendation or bring another approach into consideration. Either outcome is useful because we have examined something capable of affecting the decision.

 

When the recommendation stays the same

A second perspective does not have to produce a different answer to be valuable. Sometimes the research and discussion confirm the adviser’s original view, having tested it against a credible alternative.

The proposed transaction is unchanged, but the adviser has more to draw on when explaining it. A lower-cost option has been considered properly, an existing benefit assessed or the possibility of achieving the objective without making a change explored. For those managing advice businesses, that is a contribution worth recognising alongside completed cases and turnaround times.

 

Could a colleague see why we chose this?

By the end of a case, the adviser and suitability consultant usually understand why one approach was chosen. Some of that understanding can remain in conversations and emails rather than making it into the explanation the client receives.

A report that describes flexibility or ease of administration needs to connect those features to the client’s plans. Where a higher cost has been accepted, the benefit justifying it should be clear. Where an existing arrangement is retained, the reasoning should explain why the alternatives did not offer enough improvement.

Writing this down is a useful test. If the explanation is difficult to make specific, there may still be a point to resolve. It also gives a colleague reviewing the advice later a clearer understanding of what the recommendation depended on, particularly if the client’s circumstances have changed.

At We Complement, that exchange with the adviser is central to our suitability consulting work. It gives us the opportunity to contribute while the options are being considered, and then carry the reasoning through into the report.

When two approaches are credible, could someone reading the file understand why one was chosen and what would have made the alternative preferable?

Written by Paul, Managing Director