Annuity specialist MGM Advantage admits timescales to get a suite of new products launched in time for the new pension freedoms coming into force next April are “very challenging”, but that the firm will have some ready to go and is already testing propositions with advisers.
In the latest FTAdviser video interview, MGM Advantage’s pensions technical director Andrew Tully revealed business was hit by the Budget announcement, which has reduced annuity sales by around half at a number of firms.
A month after the Budget, MGM announced it would be making 80 redundancies and will launch a “radical new proposition” after admitting it “would be madness” to ignore the pension reforms.
Mr Tully told FTAdviser’s Emma Ann Hughes that it has done extensive research and is already moving on to testing new propositions.
He said: “We are quite a small company and the benefit with that is that we can be nimble and we have a reputation for being quite innovative.”
Within a few weeks of the Budget, Mr Tully said MGM Advantage launched a piece of research asking advisers and their customers what type of access to their pension pots they would like.
He said the firm has now taken the findings of this research and has done development work, mocked up websites and literature, and is now out testing that with advisers to make sure it is exactly what they want.
Mr Tully said: “Time is of the essence, but it is important that we build what advisers and their customers want.
“April 2015 is a very challenging timescale. So, am I confident that we will have everything ready for then? Absolutely not, but I am confident that we will have some things ready for then.
“I think customers want a whole range of things and it differs depending on how much money they have got. But they want greater flexibility, they like the idea of more choice and being able to pass funds on to family.
“But they also want security. While there has been a lot of talk about people taking the money out and spending all the money on a flash car, the majority will not use it that way.
“They want some level of guarantee and sustainable income so some form of annuity may well be part of the solution.”
