Corporate advisers think income drawdown is suitable for around half of scheme members but do not think it can be delivered on a non-advised basis, new research has shown. WATCH THE WEBINAR PRESENTING THE RESEARCH (requires Cisco Webex download)
A survey of 158 intermediaries by Corporate Adviser Intelligence shows on average, advisers think drawdown is suitable for 47.5 per cent of employees in schemes they oversee, but 73.8 per cent are either negative or very negative about the idea of non-advised drawdown, with just 9.1 per cent of advisers either positive or very positive.
The research conducted for a report Pension freedoms: Meeting the advice challenge through the workplace produced in association with Royal London, found that 27.5 per cent of corporate advisers are planning to change their charging structures to increase their ability to deliver advice in the workplace. Advisers predict, on average, that more than half of their clients’ employees – 51.5 per cent – will seek advice on their at-retirement options.
The research found corporate advisers are adapting their businesses to the post-reforms landscape, with 68.7 per cent planning to change the way they run their business to enable them to increase their ability to deliver advice in the workplace, whether by implementing new technology, engaging new support and client-facing staff and developing their approach to charging.
Advisers expect employers to pick up at least some of the tab for advice costs, with 65.1 per cent of the sample expecting them to meet their advice fees. But two in five employers – 39.5 per cent – are setting up arrangements where advice is made available to employees which they then pay for, benefiting from the employer’s ability to cut a good deal on fees.
Corporate Adviser editor John Greenwood, author of the report, says: “This research reveals a gulf in expectation between distributors – advisers, and product manufacturers – providers, when it comes to non-advised drawdown. Corporate advisers are overwhelmingly negative about the idea of non-advised drawdown, seeing it as risky and likely to lead to bad member outcomes in some cases. They fear that serious member detriment could ultimately lead to regulatory enforcement action against those held responsible for such arrangements.
“Several providers are, though, developing propositions to target the mass market with solutions that do not give full advice. There is clearly a mismatch in expectations between advisers and providers here, so work will be needed to ensure viable solutions can be put in place.”
Royal London business development manager Jamie Clark discussED all the findings of the report with Corporate Adviser editor John Greenwood in a webinar took place on Tuesday 14th July 2015. CLICK HERE TO VIEW