Annuities specialist MGM Advantage and equity release provider Stonehaven have merged and rebranded to create Retirement Advantage, with the new entity set to launch a new portfolio retirement income product announced previously by MGM later this year.
The new retirement product, the Retirement Account, is set to be launched in the autumn later in the year. Expected to include annuity-style guarantee options alongside a flexible drawdown offering, MGM announced its development, with few details, in November.
Speaking to FTAdviser, Chris Evans, chief executive of MGM and now also of Retirement Advantage, explained that after having done business with and been the sole lifetime mortgage funder behind Stonehaven for five years, last January it acquired the firm outright.
The moves come in the wake of new retirement freedoms, which have severely impacted annuities firms. MGM was the first to announce redundanies in the wake of the 2014 Budget, confirming the loss of 80 staff the following month as bosses cited “madness” of ignoring the changes.
Mr Evans said: “We invested heavily and saw an opportunity to declare a complete focus on the freedoms, so decided to combine the two businesses and create a new brand.”
Both separate firms will continue as usual, but Retirement Advantage will aim to provide a broad and competitive retirement product range, taking in annuities for those seeking a guaranteed lifetime income and equity release products for those seeking to unlock cash from their property.
Mr Evans noted that while the advertising campaign would be direct to consumer in order to build the brand, the products would only be sold through advisers.
“With greater numbers of people including their property as a means to fund retirement aspirations and advisers adopting a holistic view of planning, drawing on all assets to fund financially demanding retirements, the combining of equity release and retirement income specialisms makes eminent sense,” Mr Evans added.
Last month MGM launched money-back guaranteed annuities, effectively addressing one of the main criticisms of the product, according to Mr Evans, while several new equity release features have been added recently, including free valuations, flexible drawdown and higher loan-to-values.
“We are very excited about our plans for the Retirement Account - we are taking our time to develop and deliver something to market which is very different to anything available today,” he concluded.