LV’s interim results for the first half of the year, published this morning (August 6), showed that sales of its life and pensions products had dropped by 27 per cent from £970m in the first half of 2018 to £710m for the same period in 2019.
This was due to investor uncertainty and a fall in the number of DB transfers, LV said.
The provider will now focus on helping advisers with clients that hold between £100,000 to £500,000 in a pension pot in a way “that LV has not done before”.
Clive Bolton, managing director of retirement and saving at LV, told FTAdviser these clients were of particular interest as it was more than likely that they will spend all of their retirement funds in their lifetime.
Mr Bolton said: “This group is often difficult to advise as they can’t afford to take a big knock on their funds as they need them to last their entire lifetime.
“Also, many don’t want to buy a lifetime annuity so the adviser has to put together a suitable package of investments, which can be difficult to manage.
“LV is working in this space to improve and support advisers who have these customers.”
He added: “New business is being held up by market uncertainty, which has been caused by Brexit.
"Every day it looks more likely that there will be a hard Brexit, so people are less likely to switch providers and fund profiles.”
Mr Bolton also explained how the DB transfer market has transformed with a bigger focus on holding assets rather than acquiring them.
Mr Bolton said: “Over the last two to three years there has been a lot of focus on advisers and providers acquiring assets from DB transfers but now the focus is on helping advisers support their clients in terms of managing these assets.
“The assets are now on our platform and advisers now have to manage these funds over the retirement years.”
The firm does not disclose volumes or numbers of DB to DC transfer business.
LV also announced today that it had achieved strong growth in sales of it fixed term annuities.
New business sales for pensions and annuities increased by 46 per cent to £137m in the first half of 2019, compared with £74m for the same period of 2018.
Mr Bolton said: “Fixed term annuities have been very popular at the start of this year and it is not difficult to see why.
“Even though interest rates are low, they provide certainty in a world that looks increasingly volatile from an investment perspective.
“Increasingly we are seeing that clients like having a part of their income to be guaranteed without having to commit themselves to a lifetime annuity.”
In May, LV appointed Clive Bolton - previously managing director of retirement solutions at Aviva Life UK - to lead the savings and retirement business.
At the time LV said Mr Bolton's move reflected the mutual's focus on the retirement sector and that he had the necessary expertise and experience to help LV grow its later life market.
At the end of May, LV agreed to sell the remaining shareholding in its general insurance business to German insurance group Allianz for £365m.
LV had started the process in December 2017 when it sold a 49 per cent stake in its general insurance business to Allianz for £500m.
amy.austin@ft.com
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