Two advice groups, a pension administrator and a life company have joined forces to launch a retirement advice and guidance service.
The project brings together Foster Denovo and Towry who have teamed up with Capita Employee Benefits and LV, to bring to market ‘At Retirement’, a service at aimed at members of defined contribution workplace schemes.
‘At Retirement’ offers unadvised, robo-advised and fully advised options.
Capita stated both the unadvised and the robo-advised options would be provided by LV.
The non-advised option was designed “for members who know what retirement strategy they want, which may typically include an annuity purchase”, the statement read.
The robo-advice option, meanwhile, was described as being for “relatively straightforward, medium sized pots, which is backed up by telephone support from regulated advisers”.
Members opting to take the full advice service could choose an adviser from either Towry or Foster Denovo, Capita stated.
Gary Smith, head of DC at Capita, said the service was designed to address the fact that many retirees do not want to pay for advice, preferring to rely on guidance from their employer when they are still in the work force.
“Unless they are offered this service, ill-informed retirees risk making bad decisions, at a time when advice is essential,” he said.
Foster Denovo chief executive Roger Brosch said: “We have always advocated the need for financial wellbeing in the workplace. It is therefore extremely positive to see Capita supporting its clients’ employees in this way, and to be involved in something that has the potential to affect many lives.”
Andy Cowan, head of private client at Towry, said retirement was “not just about pensions” but also about planning for a “lifestyle”.
“At Towry we are well placed to deliver this and are delighted to be working with Capita to deliver advice at a critical stage in an individual’s life.”
Matthew Harris, director of Harris Independent Financial Advice, said of the move: “In general, we’d welcome better advie given to members of workplace pension schemes. Too often they just go with the solution their employer nudges them into.”
On the robo-advice element, he said it had “its place” for people who are “happy only to deal with a computer screen” - though he questioned whether the advice element in LV’s offering would prove enough to persuade such investors to move away from unadvised online options such as that provided by Hargreaves Lansdown.
He said a number of providers - most notably Nest, the government-owned auto-enrolment provider - were looking at adapting to the pension freedom landscape.
However, unlike many in the industry, he was relaxed about a government-backed provider entering the retirement market.
“Insisting that Nest offers nothing for drawdown is unreaslistic,” he said.
james.fernyhough@ft.com
