Royal London Pensions  

Royal London named advisers' favourite provider

Royal London named advisers' favourite provider

Royal London is by far the most popular pension provider among financial advisers, a new report by research firm Defaqto has found. 

The mutual came top in both the number of advisers that use its products, and the number who class it as their preferred provider.

Other popular providers included Old Mutual Wealth, Aviva and Standard Life.

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The Defaqto Service Ratings surveyed 280 advisers, asking them to name which providers they use and which one they prefer. It then asked them to rate providers against six service categories.

Royal London and Aviva were the most commonly-used providers, with 40 per cent of advisers recommending their products.

Life industry behemoths Old Mutual Wealth, Standard Life, Prudential and Aegon followed in that order.

In the preferred provider category, Royal London was way ahead, with more than 25 per cent of advisers picking them.

Old Mutual Wealth was in second place, with 20 per cent, followed again by industry giants Aviva, Standard Life and Prudential.

Bottom of the list were Cofunds, Metlife and True Potential.

Less established players did much better in the six service categories, which included strength and brand, staff, product and proposition, new business servicing, existing business servicing, and online services.

Nucleus and Parmenion Capital Partners did particularly well, coming joint first in online services and existing business administration.

Nucleus came joint first in every other category but "staff", while Parmenion topped every one but "strength and brand".

Royal London did not win any single category, but came second in every one but online services. 

The survey also asked advisers what products they were recommending.

Personal pensions remained the most popular product at almost 80 per cent, although popularity fell marginally on last year's (2015) figures.

Drawdown was second on the list, with more than 85 per cent advisers using this class of product. That was up from just over 80 per cent in 2015.

The biggest gain was in self-invested personal pensions (Sipps). In 2015 less than 50 per cent of advisers reported using the product, but in 2016 this rose to more than 70 per cent.

The number of advisers recommending annuities fell, but it remained close to 50 per cent, making it the fourth most popular product.

Individual stakeholder pensions, small self-administered schemes (Ssas) and fixed term annuities all fell in popularity. 

David Cartwright, head of insight and consulting for wealth and protection at Defaqto, said, given many providers were offering similar products, service was often a "key differentiator".

"Getting the pension product and proposition right and clearly communicated, along with the purchasing process from providers should be a given and to advisers these are the most important areas," he said. 

"But providers should consider all elements of service and allocate resource where appropriate to avoid dissatisfaction from their customer base and adversely affect the adviser’s product selection.”

Alan Chan, a chartered financial planner and director of IFS Wealth & Pensions, agreed that Royal London was one of the best pension providers in the market, saying the firm had a strong product offering and was "very good value for money".