Helen Morrissey talks to Nick Flynn about the launch of The Retirement Adviser - a specialist service focused on the post retirement market
Tell me about The Retirement Adviser?
The Retirement Adviser is a retirement specialist adviser owned by the LEBC group. We are purely focused on pensions with a big annuity and at-retirement focus. We also aim to deal with pension transfers too. Any other business we receive will be referred to another part of the LEBC Group. The aim is to develop us as the specialist retirement part of their business. They've been very supportive as we have looked to set up this business. We have two people who focus on annuity work - Kirsty Turner is the annuities manager and Lucy Bellman is retirement consultant. I specialise more in the income drawdown/third way area. We have Mark Taylor who specialises in pension transfers and we have also two administration staff.
Why have you chosen to start The Retirement Adviser now?
Changing demographics means that the retirement market segment is meant to grow very quickly. The ABI has issued stats that say they expect this market to double in the next three to five years. However, I think these projections are conservative - I believe the market will grow much more and it has certainly become more complex. For instance purchasing an annuity used to be extremely easy. Often all the adviser would need to do is look at The Exchange to get the best annuity rate. However, this is no longer the case. DC schemes are also growing very quickly. We've had people in their 50s wanting to know more about going into drawdown to get the most from their pension pots. We've also seen the enhanced annuity market growing massively with roughly half of all retirees qualifying for enhanced rates. Annuity rates have also held up well in recent years despite market volatility. People are beginning to realise they have more options about how to take their retirement income.
How do you expect the annuity market to develop going forward?
I expect the enhanced and impaired annuity market to continue to grow and we will look to make ourselves available to people looking for advice as to the best way to proceed. However, there is so much going on within this market we have to work hard to make ourselves heard above all the noise and be prepared to fit in with people's needs. For instance with annuity business we are happy to work on a commission basis to see how high a rate we can get for them. We will be looking to create more of a presence within the market as time goes on. We hope this is reflected in the name we have chosen - The Retirement Adviser. People need to know what we are doing and what we can offer and the name makes it very clear. We aim to work with anyone who is coming up to retirement and wants to make plans though we think we will likely specialise in more high net worth clients. However, we are happy to work with smaller funds if needed. While these smaller cases may not be so profitable on their own, if we are working with several small funds together then it makes our job easier.
What do you see as being the main challenges you face in the market right now?
We need to manage client expectations and really make things happen for them. As a rule people don't know how much their retirement pot will generate for them in terms of income and we need to ensure they know just how much they can expect. We also need to be careful about changes in annuity rates. At the moment annuity rates are changing every three to four days and we need to be mindful of this when we are preparing annuity quotes we should also be aware that while some providers work very quickly when it comes to transferring funds - others don't. The ABI has launched its Options campaign in association with several insurers. It aims to fast track the transfer service and in some cases it has reduced the transfer process from 55 to 12 days. By doing this the ABI has turned a process that was once very difficult into something that is much easier to manage. However, this kind of initiative only works with two willing partners. It's a shame that people have to experience delays but I think more people will look to give this business to more transfer specialists as time goes on.
What do you think the future holds for third way products?
With regards to third way products you could almost say current financial conditions are something of a perfect storm for these products as people do look for more guarantees. However, the only danger is in the cost and you have to ask if this ultimately outweighs the pros. Are they too complex? People can glaze over as you explain these products to them - it's all a bit new for them. People tend to look for a familiar brand offering a simpler concept. Hopefully this will happen. For the moment third way products are all a bit too unfamiliar but we shall see what happens.
How can people contact The Retirement Adviser?
People can either contact us via the helpline 0808 1787 335 or else go to our website at www.theretirementadviser.com
Joined as head of strategy, multi asset, in June
Group income protection
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Set to become part of Single Financial Guidance Body