Defaqto has launched a market update explaining how unit-linked guaranteed products can be used in client advice propositions.
Currently, around three quarters of those retiring each year purchase an annuity, but once the changes in legislation come into force next April, retirees will have access to full withdrawal, an annuity or drawdown, and potentially other products created by providers.
Therefore the independent research firm believes that advisers will need to carry out multiple disciplines and deliver a range of services where they are offering retirement income planning.
Defaqto’s latest update takes a more detailed look at how unit-linked guarantees - investment products that can be held in a number of different tax wrappers - can be applied to drawdown strategies.
From an investment risk perspective, these products tend to be viewed as sitting between annuities and fully invested drawdown, with only long-term investment strategies.
Richard Hulbert, wealth insight analyst at Defaqto, suggested that advisers should try to understand the market positioning of all product and fund types, as well as their key features, so that the full range of products and funds can be considered when providing retirement advice and planning.
“Producing income in retirement is not just about using wealth within the taxation environment of pensions.
“That is why this guide summarises which other tax wrappers ULGPs are available through, as access and client personal taxation circumstances may dictate that one or more tax wrappers are required to meet client needs.”
peter.walker@ft.com
