Russell Warwick only joined Primetime Retirement in January this year but already the benefits of working at a small company have become apparent to him.
“It’s certainly one of the things I noticed very early in my tenure – the ability to move and make things happen quickly is much easier in a small business like this,” he observed.
Mr Warwick took on his new role as managing director of the annuity provider after 25 years at Prudential, making the jump from a big industry name to one which is less well known in the marketplace.
He has wasted no time in implementing changes at the business.
“We’ve broadened our distribution footprint quite significantly already this year and we’ve already broadened our basic product proposition,” he said. “And a lot of that, because it’s a small company, is very much working on adviser feedback.
“So I have the luxury, in a small company, to be able to go out and talk to the major distributors and say: ‘What is it about my proposition and what could we do with it that would really help your business?’ And I have much more flexibility, then, to go back and make the changes.”
His previous employer Prudential made the decision to pull out of the annuity market entirely in early 2017, having withdrawn from the open annuity market initially.
Having joined a fixed-term annuity provider, Mr Warwick must believe there is a market for this type of retirement product.
He confirmed: “Yes, I’m a proponent of the annuity market, but I’m also a proponent of the drawdown market. The key is using [each of] those for consumers in the right ways and at the right time.”
He continued: “We think we offer consumers a very interesting middle-way-type option, where the consumer effectively has the ability to have the certainty of the known capital protection and a known income for a period of time, while maintaining some of the benefits of drawdown in terms of being able to keep control of the funds.”
But he admitted the industry needed to improve in terms of talking about drawdown and annuities in combination, and added “one of the innovations our industry needs to get better at is how to blend those types of propositions, within a single proposition and a single product”.
Primetime’s parent company is Key Retirement Group, which is also the owner of equity release adviser Key.
Here, Mr Warwick has spotted an opportunity to bring together the equity release and pensions marketplace.
“Typically, when a customer gets into retirement, his two biggest sources of assets will be his pension fund and his house,” he said.
“Actually, looking at how those two can work better in synergy, rather than being regarded as separate, is an interesting aspect.”
Asked how this synergy might look, he does not give too much away.
He replied: “I’ve been talking to a number of advisers about this and the way in which pensions now work if you’re thinking about them for inheritance tax purposes actually has some very interesting connotations.
“So I think you already see a lot more sophisticated advisers modelling total asset wealth and so I think it’s going to become more common to model total asset wealth, rather than modelling pensions in isolation and then, when your pension money runs out, equity release becomes the next thing.”
He observed: “I think what you’ll see is a lot more sophistication develop in terms of ‘I’ve accumulated these assets, how do I get those to fund my retirement?’”
Pension freedoms have clearly shaped the pensions industry over the past few years, but Mr Warwick has seen far more change over his three decades in the industry.
I think there is really still a big need in our market to get back and say, how can we give good-quality support, advice and guidance services to the mass market that badly need our services?Russell WarwickHe lamented: “For me, seeing the industry shrink back from where it was 20 to 30 years ago is probably one of the saddest parts of when I look at how our industry has developed.
“30 years ago we were an industry that engaged with about 60 per cent of the population and we’ve shrunk back from that.”
He urged the pensions industry to “find ways to become more relevant to more consumers because I think it’s an industry that can do a huge amount of good for consumers if done right”.
He acknowledged the issues were well documented. “I think there is really still a big need in our market to get back and say, how can we give good-quality support, advice and guidance services to the mass market that badly need our services?”
The pensions industry has suffered some reputational damage in recent years. Most recently, the rise in the number of pension transfers has caused alarm, as consumers decided to transfer out of their final salary pensions and move into defined contribution schemes to access their cash.
Mr Warwick said: “The common language that still I hear consumers use is ‘how do I get at my pension fund?’
“I don’t hear them saying, ‘how do I get at my current account?’ There is that mindset move we have to help consumers make. Because if they started from a point of thinking how do they get at this money, then they’re potentially starting that from the wrong place.”
Ellie Duncan is features editor of Financial Adviser and FTAdviser
