Personal Pension  

Royal London unveils warning service

Royal London unveils warning service

Royal London plans to launch an early warning service to help advisers assess their clients’ drawdown plans.

The pension provider last week announced it is developing an online ‘drawdown governance service’ designed to make it quicker and easier for advisers to review the sustainability of their client’s income.

Fiona Tait, pensions specialist at Royal London, said the service will flag any issues so advisers don’t discover too late that a client’s underlying fund is no longer able to support their income objectives.

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Key features:

• Summarise those clients who are potentially at risk of not meeting their agreed income objectives.

• Compare the projected and actual performance of individual drawdown plans.

• Assess the sustainability of the target income against agreed objectives.

• Produce easy-to-read client reports for advisers to use in client reviews.

• Provide historical evidence of client reviews and help advisers to meet their compliance requirements.

Ms Tait said: “There are encouraging signs that people are acting sensibly following the introduction of the pension freedoms - but it is early days.”

Adviser View

Keith Churchouse, director at Guildford-based Chapters Financial, said: “I think the pension freedoms have rather confused the message that pensions provide income for old age, so I think anything that helps advisers warn clients against aggressively stripping their pension funds is a good idea.

“I still think there is a love affair with accessing pension pots at the moment, and I think that needs to be quelled, so from that point of view this early warning service is worthwhile.”