LV= urges advisers to demonstrate they are worth it
Product provider says Money Advice Service should take more responsibility and urge consumers to seek professional financial advice.
Advisers need to demonstrate that they are worth £200-£300 an hour in order to capitalise on smaller pension pots in the post-Retail Distribution World, LV= told FTAdviser.
Michelle Cutler, head of investment-linked annuities at LV=, slammed Primetime Retirement who previously said that most fixed-term annuities are “simple” enough to be sold on a non-advised basis.
Ms Cutler does not agree with this view, telling FTAdviser that there are five main providers in the annuity market and they all have products with “varying levels of guarantees”, therefore it is not in the consumer’s best interest to shop alone.
Ms Cutler said: “It is quite a level of detail for a consumer to understand. Advisers can add value by simplifying the process and they can give consumers value for their money but advisers do have a lot more work to do to demonstrate that.”
However, post-RDR, it is no secret that there is likely to be an advice gap as “middle of the road” consumers will not be able to afford advice, particularly those with pension pots of less than £20,000.
Ms Cutler admitted there is an “element” of this but urged advisers to make themselves affordable, by offering clients value for money.
She said: “There is lots of potential out there for advisers and the industry to help service small pots.
“The Money Advice Service may be able to take more responsibility here and put out a stronger message. They should be urging consumers to go and seek professional advice. They need to be telling consumers that there is value in it, rather than the Mas just giving general descriptions.”
Indeed, the Pension Income Choice Association previously told FTAdviser that it is in plans to develop an adviser register to make it easier for consumers to find an adviser in their local area that will be able to offer advice on shopping around for at-retirement products such as annuities.
The adviser register will ensure that a consumer can find an adviser within a given distance from their home - for example within five miles - that can offer face-to-face services or help consumers over the telephone.
Stephen Lowe, a member of Pica and group external affairs for Just Retirement, said that the register could form part of a website or be a website in its own right and would feature in the Money Advice Service’s new shopping around guide.