Skipton Building Society has moved to fill the retirement advice gap left by advisers who have moved towards higher net worth clients post Retail Distribution Review, according to Andrew Barker, managing director of advisory subsidiary Skipton Financial Services.
The building society launched its retirement advice service yesterday (1 July) after listening to more than 2,600 customers and non-customers during 18 months of research.
Mr Barker told FTAdviser that helping people invest for their retirement is exactly the kind of thing building societies should be doing, particularly for those customers that are increasingly finding it difficult to get advice elsewhere.
He said: “We are not dealing with the typical IFA market particularly. Our customers are really investing from around about £20,000 upwards, so these are typical building society customers who have to a large extent been disenfranchised by the Retail Distribution Review changes where most advisers have moved up to the £100,000 or £250,000 plus market.
“We don’t normally find ourselves in competition with other advisers, typically the client we’re dealing with are those that the rest of the financial advice world don’t want to deal with.”
The retirement review service will be complemented by an online retirement planner, with advice given by in-branch Skipton Financial Services’ advisers.
Those who choose to proceed will be guaranteed a call before making a final decision on their retirement pot, as well as regular contact in each of the five years leading up to retirement.
In this year’s Budget, chancellor George Osborne said all consumers will be offered free guidance at the point of retirement.
He promised that individuals approaching retirement will receive “free and impartial face-to-face guidance to help them make the choices that best suit their needs”.
Mr Barker said: “It is not, as such, the ‘guidance guarantee’ that was talked about in the Budget. If a customer comes to Skipton and is passed to one of our advisers they will be given overall financial advice as opposed to just guidance. It is full advice on the range of options available.”
The initial retirement review is free of charge, with specialist advice from SFS then based on its existing investment rates of 4.5 per cent, which reduces for large investments, in addition to an ongoing adviser charge of 0.75 per cent a year.
Customers are not obliged to go with Skipton products, as while they are restricted advisers, the firm offers a variety of products across the FundsNetwork and Cofunds platforms.
Mr Barker said: “This is the start of the proposition which is going to be improved and expanded upon over the next year and beyond, but we certainly see pensions as an area which has an awful lot of opportunities, with demand fuelled by the Budget changes that have made pensions a lot more attractive to many people who in the past who have discounted them because of their inflexibility.”
