The results are detailed in the table below:
| Thinking about clients approaching retirement, which of the following statements best reflects your opinion of how well platforms can accommodate retirement income needs? | |
| Platforms are already well positioned to serve my clients’ retirement income needs | 40% |
| Platforms need to further develop the ‘at retirement’ services they offer to serve my clients’ retirement income needs e.g. product wrappers, tools etc. | 49% |
| Don’t know | 10% |
| Other | 1% |
| Respondent base – 452 financial advisers | |
Close to half of adviser respondents, platform users, think that platforms “need to further develop the ‘at retirement’ services they offer to serve a client’s retirement income needs”. These ‘at retirement’ services could come in the form of either additional product wrappers or tools on the platform.
Platforms need to decide what to do in order to take their propositions to the next level. While the rush has been on to grow the level of assets under management and to achieve profitability, platforms were not going to be immune to the wave of ‘baby boomers’ preparing their retirement income strategies.
Operators therefore need to consider the requirement for clients to take money off the platform, something of an anathema to their mind set.
Where the disinvestment involves the purchase of a conventional pension annuity it is admittedly more difficult to see how the platform can involve itself in proceedings, beyond recording the shape and level of income that is being taken within the client’s platform records.
But where there might be an element of investment involved in the retirement income solution a platform may well be able to enhance their links to such solutions. Platform operators will be weighing up the cost/benefit opportunity here but past research does indicate that advisers will be increasing the amount of retirement income business written (see table below).
| Thinking about specific areas of your business, in value terms, do you think your amount of business in the following areas will decrease, increase or stay the same post-Retail Distribution Review (RDR)? | |||||
| Base | Will decrease | Stay the same | Will increase | Don’t know | |
| Retirement income | 161 | 4% | 60% | 29% | 7% |
On/off-platform business levels
It is interesting to look at the levels of adviser business written on and off platform from a product/wrapper perspective.
Although we did not ask adviser participants in our platform study to confirm the split of business between accumulation, consolidation and retirement income, pensions is still one of the areas where a chunk of business, 38 per cent, is written off-platform. This is also the case with offshore and onshore bonds, products which may also be involved in a client’s retirement income strategy.
| % business written on-platform | % business written off-platform | |
| ISAs (stocks and shares) | 91 | 9 |
| Direct (non-tax wrapped) | 80 | 20 |
| Pensions | 62 | 38 |
| Offshore bonds | 54 | 46 |
| Onshore bonds | 47 | 53 |
| Respondent base – 452 financial advisers | ||
If platform operators want to see more pensions money coming their way this is another indicator that enhanced retirement income capability and solutions might be required in order to achieve this objective over the next few years.
Planning with longevity in mind: life stages
Not only will clients generally be living longer but they are likely to move through a variety of life stages during retirement. Each of these life stages will come with different requirements, including the fact that:
• The client is likely to have different income requirements through these different life stages
• The client is likely to have a different health and medical status through these different life stages
• The client may have contrasting attitudes to risk and loss during these different life stages
