Advisers must update due diligence: Standard Life
Standard Life has called for advisers to update their due diligence documentation with the focus moving away from the accumulation phase to the retirement stage.
The firm suggested that advisers seek reassurance that a platform or provider has the capability to run a robust drawdown service, laying out eight key questions they should ask when choosing the right drawdown partner:
• how many drawdown customers do you currently administer;
• what are the total assets under management derived from these customers;
• have you prepared to deal with the increase in demand for drawdown post April 2015;
• which drawdown options do you currently offer and which will be offered post April 2015;
• what flexibility do you offer around the payment of drawdown income;
• what are your service level agreements for paying tax free lump-sums, change of income and ad-hoc payments;
• do you provide clients with payslips/income statements; and
• do you pay income net of income tax.
Last year, Fundsnetwork told FTAdviser that the platform industry will develop a real focus on the decumulation market. At the time, their head of advisory services Jon Everill said: “New propositions and services that support clients at and in retirement - specifically the management of income in retirement - will start to develop quickly from [this] year onwards.”
David Tiller, head of adviser platform propositions at Standard Life, commented that instead of platforms and pensions providers offering a managed savings service followed by a packaged annuity sale at retirement, they now have to offer what are a sophisticated and flexible set of systems and services to support clients living off their portfolios.
“Pension contracts must now be able to see a client through their entire retirement, reliably providing access to capital, day-to-day income and serving multiple investment goals supporting short, medium and longer term income needs as well as preserving capital for inheritance.
He added that it was understandable that clients living off their portfolio might have a higher need for advice and a higher need for service.
“So while a current platform or pension provider might be very good at holding assets in accumulation, this does not guarantee they will be as good at managing them and paying them back out in drawdown.”
ruth.gillbe@ft.com
