The importance of IFAs to LV=, the winner of this year’s of the Financial Adviser Outstanding Achievement Award, is demonstrated in its business figures. Advisers account for “nearly 100 per cent” on the retirement side, and “92 per cent of protection business”, said LV=’s managing director of life & pensions Richard Rowney.
With such a reliance on the IFA sector, one might expect there had been a decline in business following RDR’s depressing effect on adviser numbers. Not so, said Mr Rowney: “Since RDR we have seen growth in the level of business in both retirement and protection. We are growing at 20 per cent a year. However, the balance in our business has not changed, with IFAs forming around 90 per cent.”
The close relationship between the society and advisers was particularly evident during the build-up to the implementation of pensions freedoms in the spring. Mr Rowney said that talking to advisers had prompted the development of “blended solutions combining both annuities and drawdown”.
The society was also quick to respond to advisers’ needs, said Mr Rowney: “We launched one-year fixed-term annuities within 10 days of the Budget, which advisers welcomed as they did not want clients to be tied down in the three- or five-year fixed-term products that were available at the time.”
Mr Rowney continued: “We have been coping with pensions freedoms better than most. Many providers had a drawdown or an annuity model. We started with that toolset so it was more easy for us. Advisers wanted companies with the flexibility to combine both approaches. That was a very big factor in advisers wanting to put their business with us.”
LV= also saw the need to increase staffing levels to cope with the situation to ensure service standards did not slip, rather than just relying on IT developments alone to take the strain. Mr Rowney said the society placed an additional 70 staff in its retirement solutions base in Hitchin, Hertfordshire, well before pensions freedoms arrived.
“This was around four to five months in advance to allow for training. So, during the huge amount of activity surrounding this event, the service level did not change at all. Advisers got through within 20 seconds, whereas they had been frustrated at the service levels they had experienced elsewhere,” claimed Mr Rowney.
The society places great emphasis on its mutual status enabling it to take a longer-term view. This, Mr Rowney claimed, was shown in recent times: “While some competitors may have been forced to cut costs, we in comparison are a growth company. In the seven years from 2007 to 2014/15 staff levels have risen from 1,700 to more than 6,000.”
LV= has also been at the forefront of online tool development, such as the pensions robo-adviser, which had attracted interest from around 50 competitors as well as the government, according to Mr Rowney. While the robo-adviser had been developed after research showed a section of the public were wary of taking advice and baulked at paying large fees for it, it could however be badged by advisory firms and used to gain contact with, and revenue from, the section of the public who would not normally approach an advisory firm.
