Partnership has closed its hybrid drawdown-annuity product, following the firm’s merger with Just Retirement in April.
A statement to its clients confirmed the Enhanced Retirement Account, which combines an annuity and a drawdown product within a Sipp wrapper, would close the product to new investors on 12 August.
In April, Partnership transferred the majority of its annuity products to Just Retirement’s life company, which remains a separate legal entity. However, it had originally planned to continue writing the ERA itself.
A spokesperson for Partnership did not explain the firm’s reasons for cancelling the product, simply saying it was part of the merger process. They would not disclose whether or not the product was withdrawn as a result of low demand.
However, in its note to clients announcing the closure of the product, Partnership kept the door open to offer new hybrid products in the future.
“We believe blended solutions will be a significant part of the retirement market in the future and we will be working to develop solutions to support advisers and their clients utilising the full capabilities of the combined JRP Group,” it read. “We are progressing this work as part of our integration activity and will share further details with you in the future.”
While Partnership would not discuss sales figures, evidence suggests hybrid products have failed to sell well.
According to figures from Selectapension, sales of traditional annuities dwarf those of hybrid products by a ratio of more than 50 to one.
MetLife was the most popular provider, followed by Aegon. Unlike the Partnership product, these two providers have created a single hybrid product, rather than a blended basket of products within a Sipp wrapper.
While some advisers like hybrid products, many say they are too pricey.
Christopher Foster, a financial adviser with Pennines IFA, said he was not convinced the existing products on the market provided good value.
“I tend to find they are expensive. When you unpick them, you find there are better ways of getting a guaranteed income,” he said, adding providers offering guaranteed drawdown are “selling a product rather than providing a solution”.
Aviva’s head of retirement policy John Lawson agreed, telling FTAdviser his firm had no plans to offer a hybrid product, because they are “poor value for money”.
