Otto Thoresen's recent letter to The Sunday Telegraph shows an industry that is ready for change. All of the recommendations put forward seem sensible and will go a long way towards helping people get more from their retirement income.
It will be interesting to see how these changes tally with any recommendations the Financial Conduct Authority (FCA) makes when the final results of its review are published early next year.
The most important recommendation from my point of view is that retirees actually talk to someone at the point of retirement. The average person does not know enough about the retirement market to be able to make an informed decision, and so support is vital.
While ideally this can come in the form of regulated financial advice, it is clear that financial advisers are not able to service everyone, and so good non-advised services need to be developed too.
Putting guidelines in place will be all important if such services are to be a success. For instance, if a married man looks to purchase a single life annuity, then there needs to be a check in place to make sure he understands the consequences.
If we can get this right, then retirement incomes will be vastly improved and the industry is likely to have made a good headstart – or even be ahead – of anything the FCA proposes.
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