Increasing complexity of delivering specialist at-retirement advice from next April may force more IFAs to outsource work in this year, according to Intelligent Pensions’ technical director David Trenner.
Speaking to FTAdviser, he said that the firm continues to work with advisers to are raising such concerns.
“We see demand growing for our specialist services in the new pension world and suspect an increase in regulatory interest in ‘retirement outcomes’ will fuel the desire for some advisers to outsource this complex work and the associated compliance risks.”
He warned this was particularly the case given The Pensions Regulator is expecting trustees and sponsoring employers to ‘help’ members and the Pensions Ombudsman has ruled against an employer which did not try hard enough to stop a member opting out of its scheme.
“So for 2015 we are expecting to see the Treasury tell the world what they really want from the guidance guarantee, and The Pensions Advisory Service and Citizens Advice Bureau rush to try to provide it.
“We are expecting employers to want help fulfilling their end of the bargain and we will see thousands of existing clients, along with thousands of new potential clients, asking questions about uncrystallised fund pension lump sums - or ‘flumps’ as they have been nicknamed - and flexi-access drawdown.”
Mr Trenner pointed out that retirees will want advice on how much income they can draw without incurring a higher rate tax and how much they should take without risking their fund expiring before they do.
“Others will want to know how much they should leave in their pension funds which will be available for their beneficiaries tax free on their death – providing, that is, that they are part of the one third of pensioners who die before 75 and not part of the two thirds who live beyond 75 when any payment will be taxable.”
Mr Trenner concluded: “It is important for the industry that we can show an improvement in retirement outcomes for retirees in 2015. I certainly don’t expect perfection overnight and genuine improvement will need to evolve over time.”
peter.walker@ft.com
