There are a number of financial planning firms who are using lockdown to develop their business and to try things they’ve never done before.
Cornerstone Asset Management is no exception.
Founding partner Jason Hemmings had the idea to offer a ‘second opinion’ pensions service a few years ago, but it was lockdown that presented the opportunity to scope the idea in more detail, and to bring it to fruition.
The result is Snapshot pensions, a free online service which aims to help consumers better understand the pensions they have.
Armed with this information, the aim is for Snapshot to act as a springboard for consumers to engage with their pension planning further, either by taking advice or by being in a more informed position to take action themselves.
Snapshot is an information-only service for defined contribution pensions, rather than an advised process.
Users enter their contact details and some basic information about their pension plan(s).
Cornerstone then collates the relevant information from the pension providers, and creates a personalised report.
Consumers may decide to do nothing with this report, carry out further research themselves with a view to making changes to their pension arrangements, or seek advice.
Jason says: “There are a growing number of direct-to-consumer (D2C) offerings out there for transferring your pension. There are some slick systems available which guide consumers through, and provide help with investment fund choice.
"But the frustration for me is that the typical consumer using such a service doesn’t tend to have that much knowledge and understanding about pensions to begin with. How can you make a decision to do something without knowing what you’ve got?”
He says the starting point for people needs to be establishing what pensions they have first, and whether these can be adapted to better suit their needs.
He adds: “Of course, these D2C services aren’t there to tell people ‘what you’ve got is really good.’ It’s more a case of ‘come and move your pension to us.’”
Under the bonnet
In developing Snapshot, Cornerstone designed the service to give people an entry point into pensions based around risk, charges and performance.
The report sets out the risk of the user’s pension, mapped to Cornerstone’s zero to six risk profiling score, and gives an explanation of what this means.
Charges are benchmarked using a scale of zero to 2 per cent, while performance data is taken from FE Analytics.
The firm has made a conscious decision to offer the service for free, but is also clear on its target market of those with pension pots of over £50,000.
Jason says: “We wanted to make sure people can use the service with no call to action to buy.
"We didn’t want them to feel that by visiting the website they’d be suddenly bombarded with emails, sales pitches or attempts to persuade them to transfer their pension online. We were very adamant about that.
“We wanted to add something of value at a time where people might have financial worries or concerns, but also where they have a bit of time to address these concerns. The only cost to us is our time.”
Consumers fill out a short online form, and provide their authority through a digitised signature, akin to signing for a delivery. The process is compatible with mobile devices like smartphones and tablets.
Cornerstone then sends off the consumer’s signed authority to the provider/s with a set of questions, and aims to send the user report out seven days from when the information is received from the provider.
Snapshot has been soft-launched to friends and family over recent weeks, and through Cornerstone’s workplace advice connections.
Cornerstone compliance officer Rebecca Kowalski says developing the service has been a team-wide effort, and a good way of channelling different insights.
She says: “We created an internal marketing team from across different functions in the business, spanning advice, compliance, administration and our trainee. This meant we had a range of ages looking at it and exploring things like use of social media.
"It’s been great to have a project to keep the team engaged, and reassuring for people at a time when they might be wondering about the impact of the virus on their job security.”
Rebecca has been supported by Cornerstone’s external compliance firm in terms of getting the messaging right.
She says: “It’s a whole new way of positioning yourself as a business. Obviously, we’ve done business development and marketing activities before now, but not really on this level.
"This has involved social media and press engagement in a way we haven’t done before, and looking at a kind of a client we’ve never really accessed before.
“Cornerstone’s core clients are high-net-worth, sophisticated investors. Snapshot probably isn’t for most of them, but perhaps it could be for their next door neighbours, or their children, or their grandchildren. So it’s opening us up to a wider market.”
Access and engagement
Over recent weeks as Snapshot has been trialled, the early indications are that people have come back with enquiries spanning multiple pensions, in some cases four or more.
Jason believes this goes to show there is an appetite out there for this kind of service, particularly where people have amassed several pensions.
Widening access to financial help has been an important driver for getting Snapshot off the ground.
Rebecca is proud of the work the firm does with its clients, and says it is rewarding to help wealthy individuals who need help as much as anyone else.
But she adds: “There are a lot of other people who would really love to engage with their finances, but just don’t have the assets now to be a typical client of ours.”
It’s something that been echoed in the firm’s work on its sustainable investment proposition.
Rebecca says: “A lot of the people I’ve been networking with really want to engage and invest sustainably. But they may be in their thirties – they don’t have a £250,000 pension fund.
"So it’s really nice to know that even if they’re not ready for our full service, there’s something else we can offer them instead.”
The digital element of the service was also really important.
Jason says: “If you look at the traditional financial services process, it’s rather clunky.
"To get the information from the provider, you usually need a wet signature. We could have had the Snapshot service capture the contact information, send out a form for the individual to return, which we then send out to the provider.
“But as soon as you introduce more action points in that process, you then start diminishing your response rate, and taking away the whole purpose of it being simple and easy.”
Instead, the digitised signature is dropped into a letter of authority, which is then emailed to Cornerstone and the individual.
They receive an automated welcome email, while Cornerstone deals with the providers. So far, all providers have been happy to accept the digitised signature.
‘Free reviews’ and initial feedback
A potential issue with offering a ‘free pension review service’ is the danger of it being conflated with scams and pension liberation schemes.
Rebecca says this concern was flagged as part of the feedback process, and the firm has sought to address it by providing some context about the Cornerstone name behind Snapshot.
She says: “We’ve set it up as a trading name of Cornerstone, and tried to position it in terms of Cornerstone being a well-established advice firm.
"It comes down to building brand, and in time as we deal with our first clients the hope is we get reviews from them and build confidence in the brand that way.”
Jason agrees that the Cornerstone name, and the ability to check this on the FCA register, should help alleviate any concerns.
He says the bigger obstacle may be screen signatures, and whether people feel comfortable with this.
He says: “The challenge was always going to be, and I think it still is, for someone to sign on their screen.
"We caveat this to say that if people don’t want to sign, we can send them the form in the post.
"What we don’t have at the moment is the data that shows how many people got halfway through, saw the signature box and decided not to bother.”
The concept of Snapshot is that it’s quick and easy to use, with an emphasis on plain, clear language.
Jason and Rebecca are pleased with the positive initial feedback they’ve received in terms of ease of use, security and customer-friendly language.
Rebecca hopes Snapshot will ultimately prompt a wider discussion.
She says: “What we’d like the outcome to be is that people will get the report and agree that it’s useful information. But beyond that, they might have more questions.
"That’s what we’d like to see, that they come back and engage, and say: ‘So what does this actually mean? What should I do about this, and what other options do I have?’
"Hopefully, it’s the start of a dialogue.”