Advised sales of personal pensions have been gaining ground against non-advised sales, latest data from the Financial Conduct Authority (FCA) has shown.
The regulator’s Product Sales Data Retail Investments aggregated statistics published today (23 October) show there were 258,825 advised personal pension sales in the second quarter of 2018, 5 per cent more than in the same period of 2017.
On the other hand, sales of non-advised products in this space dropped 13 per cent to 320,972 at the end of June, when compared with the previous year.
According to Steven Cameron, pensions director at Aegon, non-advised pension sales had peaked following the introduction of the Retail Distribution Review (RDR) in 2013, because from then, advice needed to be paid for through an agreed fee rather than funded through commission.
From then on advised sales have gradually been closing the gap, he said.
When compared with sales in the second quarter of 2013, the latest advised sales represent a hike of 71 per cent, while non-advised sales remained in line, with an increase of a mere 2.4 per cent.
Nathan Long, senior analyst at Hargreaves Lansdown, said: "Non-advised sales of personal pensions rocketed past advised sales in 2012 with the huge swell of people entering group personal pensions through auto-enrolment.
"With the new workplace pension regime bedded in, we’ve seen the number of non-advised sales fall again and I’d expect the two to settle down at a level somewhere around their pre-2012 levels."
Mr Cameron said: "This is an endorsement of the value of advice as for many people decisions about which pension to select, how to invest and how much to contribute are too important to make [without] the support of an adviser who can reassure and give customers confidence that they’re making the best decisions to meet their long term saving goals."
The number of advised sales have also been gaining ground on decumulation products – annuities and drawdown – with an increase of 18 per cent to 43,386 in the second quarter of 2018. Non-advised sales were up 7.3 per cent to 22,025.
However, FCA figures out last month showed increasing proportion of pension pots accessed through an annuity or full cash withdrawal were non-advised.
Between October 2017 and March 2018, only 28 per cent of annuities sold were advised, down from 34 per cent during the same period in the previous year.
The proportion of full cash withdrawals sold through advised channels fell to 25 per cent from 38 per cent.
The latest FCA data also shows a downward trend in Isa sales, which had peaked in 2010 and stood at 67,930 at the end of June – a decrease of 9 per cent when compared with the same period of the previous year.
Mr Cameron said: "The era of low interest rates has put pressure on cash Isa sales and they’re some way off their 2010 peak, despite repeated increases to the amount people can save tax free in Isas.
"Many savers have been tempted away from Isas towards bank accounts paying higher rates of interest, which now also benefit from tax exemptions, but as interest rates start to creep up it will be interesting to see whether cash Isas find their way back into favour."
A recent FTAdviser poll found personal pensions were the most popular savings vehicle for retirement, as 51 per cent of advisers said clients most commonly used this product to save for later life.
Almost one third (30 per cent) of advisers said their clients used company pension plans, while 19 per cent said they would use a stocks and shares Isa for their clients' retirement savings.
None of the advisers who voted said their clients would use a cash Isa to accumulate retirement savings.
maria.espadinha@ft.com
