What are the biggest challenges for advisers in the current market and how does Selectapension combat these?
The biggest challenges currently facing advisers are what to do with their clients who are at retirement, in anticipation of the changes due this April, and how any advice may be reviewed retrospectively by the regulator.
As the FCA’s latest Interim report on the Retirement Income market shows, financial advisers need to be truly transparent with clients, showing them the available options and setting out the pros and cons of each solution considered.
Many financial advice firms have large numbers of clients with historic products that were not originally designed to meet the new freedom in the pension industry expected this year.
They also need to demonstrate, in perpetuity, that the advice given has been fully thought through and the solutions presented are the most suitable for the client.
How does Selectapension combat these?
Selectapension has a range of tools which enables advisers to review, compare and consolidate clients’ pensions as well as illustrating how they can take their income in retirement to best match their needs.
Advisers are able to rapidly link “fact find” data to a rigorous process that evaluates the best solution taking account of suitable investment strategies and full charge analysis on products.
All client-facing reports produced are archived, providing evidence of research and analysis, and used for future review and compliance purposes.
What would your advice be to advisers who are unaware of the benefits of technology?
Technology for the sake of technology is worse than pointless, it is a major distraction to your business. But good technology can help secure and build business.
There are over 2,500 IFA firms using Selectapension, who integrate technology into their business and see the benefits, both from a compliance and efficiency perspective.
With increasing demands to process and store information, technology can do the heavy lifting freeing up advisers to develop and maintain closer relationships with their clients.
My advice would be to see if technology can ease the pressure points in your business. Talk to the technology vendor and, if possible, try it out and compare other firms you know before you buy.
What kinds of pension products do you think we will see in the market as a result of pension reforms?
We are still waiting for information on the kinds of products that will become available. We have seen talk of ‘u’ shaped annuities, bank account style drawdown products, drawdowns with sophisticated guarantees/underpins and other hybrid solutions.
The hybrid solutions are expected to deliver the best aspects of the current product choices whilst limiting the potential downsides. For example, the ability to tailor clients’ precise variable income requirements, including how much needs to be guaranteed, each year in retirement.
It is clear, there will be more choice and more complexity, especially for clients with higher net worth. In this world, it is critical that Advisers can help their clients evaluate the different solutions and compare them on a like for like basis.
Have you got any big plans or exciting news coming up for Selectapension you can tell us about?
We are re-engineering our Income Drawdown tools to meet the opportunities due in April so our adviser customers will have all they need to support their client recommendations and take some of the pain out of advising on retirement products in the new environment.
These tools will enhance our drawdown service and enable advisers to map target client incomes to guaranteed and non-guaranteed drawdown and annuity products, providing a one-stop shop for drawdown and annuity product research.
In addition, we have enhanced our Bureau Service so we can also provide advice on Defined Benefit transfers for advisers who may be newly engaging with this aspect of the retirement market.
What advice would you give someone starting out in the industry?
Make sure you understand what all the steps in the client engagement process cost, in time and money. Appreciate the value of record keeping and the evidence that supports your recommendations.
Most importantly, focus on ensuring you have the right tools for the trade; the best technical and compliance training (continual), great softer skills development, access to high quality clients and supporting systems that enable you to get in front of clients and do what you do best.
