IFAs to reap rewards of new landscape

This article is part of
Retirement Freedom and Responsibility - March 2015

Product complexity

David Cartwright, head of insight and consulting (wealth and protection), at Defaqto, said: “You can definitely over-engineer products so they become too complex. Some of these products in the marketplace at the moment would be impossible to use.”

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He added: “Yes to flexibility, but flexibility with simplicity, which also identifies the value of the product.”

Chris Daems said annuities would remain a major product in the marketplace, though demand for the financial offering has plummeted.

He said: “I am comfortable with how annuities are now.

“The danger is that annuity manufacturers will fight to release products when actually they do not really need to.”

Ms Altmann said pensions were not the only savings that needed to be made into retirement, adding that the government should do more to incentivise the public to save for future healthcare.

“We should allow people to withdraw money from their pension, tax free, for care costs or set up an Isa that would allow people to do the same thing, that could be passed on free from inheritance tax,” she said.

Describing this idea as “Machiavellian” , fellow panel member, Toby Nangle, head of multi-asset at Threadneedle Investments, said that providing an incentive for pensioners to leave something for the next generation would be the only way to fund long-term care.

Richard Hulbert, insight analyst (wealth) at Defaqto, predicted a surge in demand for small self-administered scheme pensions because of the flexibility they offered.

Gay Nebel, director at PML Financial Services, said that future pension products should be based on the clients’ needs instead of those of the insurance company, and reflect the flexibilities of pension freedoms.

However, according to Damian Coleman, head of individual distribution at Scottish Widows, product education was a more pressing area of concern.


Citing figures from the provider’s recent women and retirement report, Mr Coleman said the study found that 7 per cent of women and 14 per cent of men did not know what an annuity was. Another 15 per cent of women did not know what a pension was.

He added: “We have a collective responsibly to make sure people are knowledgeable on what is out there in the current environment before worrying about what might happen in the next 12 months.”

For Icki Iqbal, former director at Deloitte, the pension changes would result in more people opting not to invest their pension savings.

He said: “The key issue for people who are disinvesting is getting the decision right and choosing the product that has the flexibility to do that.”


• Stephen Bozeman is senior product strategist in the global retirement strategy group at BlackRock. Before joining BlackRock, Mr Bozeman managed Barclays Global Investors’ pension outsourcing platform, PensionSpan,