Bill Vasilieff, chief executive of Novia, has said he expects less than 5 per cent of pension investors on his platform to turn their pot it into cash, and has said that those that do will largely be doing so to pay down debts, which “makes sense”.
In the latest FTAdviser video interview Bill Vasilieff, chief executive of Novia, said: “The vast majority of people save up their pension for retirement.
“The biggest fear people have is of running out of money in old age. The thought that they are going to cash in their money to buy a Ferrari is just not real.
“We have had contact with some clients who have written to me, actually, to ask if it is true that they can access their money. I think they are all going to be about paying off debts. That makes sense to me.”
Speaking to FTAdviser’s Emma Ann Hughes, he also revealed his concerns about the FCA requiring providers to act as a ‘second line of defence’ against savers taking their pension as cash and blowing the money.
Late in January this year, a ‘Dear CEO’ letter was sent by the FCA to provider bosses setting out expectations that firms should ask clients specific questions around their circumstances, give relevant risk warnings and refer to guidance services or regulated advice.
This was to ensure customers get the best outcomes when the new retirement freedoms come in from 6 April.
Mr Vasilieff said: “The adviser does the job of advising the client. We don’t really know the clients. We have no information whatsoever so it makes it very difficult for us indeed.
“The other thing we are having some pressure being put on us is about the type of assets that customers can choose. I think all the platforms are going to tighten up on that.”