Helen Morrissey talks to The Retirement Adviser's Nick Flynn about running a business in difficult times and the growth in employers offering retirement income services to employees.
The Retirement Adviser was launched in 2008. How are things going?
We are just about to celebrate our fifth year in business and so far everything has gone well. It has helped a lot that we’ve had such strong support from our parent company LEBC which has helped us to develop in a dynamic way. Having a secure sponsor makes a great deal of difference especially during these difficult economic times. At times it has been difficult and stressful but as a rule retirement hasn’t been affected by the downturn as much as other areas. I wouldn’t go as far as to say it is recession-proof but people are continuing to retire and they need to be able to access their retirement income.
In addition to turbulent economic conditions the advisory market has also had to deal with the Retail Distribution Review.
We were well prepared but there were always going to be some areas of the business that needed to change. We had the qualifications already and over recent years we would not have employed anyone who didn’t have the relevant qualifications. In terms of fee charging we were already doing that as well. The only change we had to make was the shift from commission to fees. However, over the past three to four months we haven’t had anyone take advice and then disappear off into the sunset so that’s a real positive. If anything we have got busier and we expect that growth to continue over the coming months.
What are the key growth areas for your business?
We have seen real growth in our corporate business. We are involved in providing auto-enrolment advice to some extent but where we are really seeing growth is in the development of at-retirement services.
Defined contribution plans are now starting to mature and these employees need to access retirement income solutions. Their employers do not want to abandon them at such an important time and so they are coming to us to provide advice services.
I think the increase in popularity comes from a mixture of employers wanting to do the right thing by their employees and recent changes in regulation also mean retirees need to explore their options more than they might once have done as their DC schemes will have grown to quite a substantial sum of money.
This is proving to be really popular with employees who are really engaging with the services and this can lead to more private work for us as well. The price of providing these services is coming down as we are often dealing with several employees retiring at around the same time. We find these retirees are very grateful for such services.
On the defined benefit (DB) side of things we are seeing a huge increase in pension increase exchange exercises and flexible retirement options.
What about growth areas in terms of the products you advise on? Are there any emerging trends?
Enhanced annuities have always been a massive part of what we do. I think an area where we have seen real growth is in the income drawdown market.
‘Important to have an anchor’
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets