Retirement Advantage is set to launch its new ‘mix and match’ at-retirement proposition within the next couple of weeks, according to the firm’s chief executive.
Speaking to FTAdviser, Chris Evans explained that the Retirement Account will be written under drawdown rules, but will also feature a guaranteed annuity element and cash account, all within the same product.
“People can choose how much to take and when to take it, they can move money between the various elements, but what sets us apart from similar propositions offering these options, is that ours is truly one product.”
The first release is due next month, but the product will be continually developed and updated with feedback taken from advisers and customers, Mr Evans said.
It will be sold exclusively through financial advisers, with lots of interactive tools and support services provided.
Mr Evans said that as there is so much to think about at this early stage in the pension freedoms, it is better that customers have someone to guide them through the choices to figure out the right combination, adding that as it is not just a buy-and-forget solution and advisers will also help manage it throughout retirement.
“We talked to a lot of customers and advisers during the last 12 months and found they wanted a combination of guarantees and easy access, the potential for investment growth, with simplicity and flexibility - so that’s what we’ve tried to build.”
As for the wider business, which rebranded and merged with equity release provider Stonehaven in May, Mr Evans said that following last year’s bombshell Budget, they took the “difficult decision” to halve costs within six weeks, reinvesting money saved into working towards this new proposition for the new legislative landscape.
“Unlike some of our rivals, we decided against moving into bulk annuities and continued to focus on helping individuals, while also not looking at international expansion, as that’s not another distraction we needed.”
With regards to the recent merger of their two main competitors, Partnership and Just Retirement, he added that the move makes sense from a cost-cutting perspective, noting that his company has essentially done the same organically.
Much like other pension providers, Retirement Advantage has seen drawdown interest increase since the April changes, while annuity sales are still subdued.
However, Mr Evans commented that the annuity side of the business has grown consistently since last year’s low point, with the firm now holding up to 12 per cent market share this year.
peter.walker@ft.com
