Transfers and scheme advice drive LV= pension sales

Robo advice pioneer LV= says DB to DC transfers help drive its pensions assets by 29 per cent in H1 of 2017, up to £654m from £506m in H1 2016.

The provider, the UK’s largest friendly society, says it expects to see continued growth in the DB to DC transfer space, where it has its own end-to-end proposition, with transfer analysis carried out in-house. Overall group profits increased 58 per cent to £82m.

Staff numbers at LV= have dropped by around 400 as part of a £40m cost savings programme, achieved through natural wastage and ‘a small number’ of redundancies.

LV= says its corporate solutions business is now delivering a ‘steady flow of business’ into its advice teams, with 19 schemes either live or in implementation stage, delivering services ranging from small scheme transfers, to ongoing provision of retirement advice to scheme members.

John Perks, who was promoted to managing director of the life and pensions business in June, says LV= expects to see further growth in advice on transfers despite the new stricter rules currently being put in place by the FCA. LV=, whose business model targets DB transfers at a scheme level rather than by partnering with individual advisers, does accept insistent clients onto its platform after they have been through its advice process, following an education process of the consequences of transferring.

Over the last two years it has invested £80m in digital resources, launching of its robo para-planner in conjunction with Wealth Wizards.

Perks says: “We are now able to deliver compliant pensions advice in 90 minutes, which we are rolling out to an increasing number of schemes.

We see growth coming from DB to DC transfers, despite the new rules, which we think are sensible. They show that the FCA realises that DB transfers are here to stay for the mid to long term. The regulator is basically saying it’s OK to do it, but you have got to do it well.”