Following on from this, in 2019 Just launched the Secure Lifetime Income product which as the name suggests, offers a secure income for the client’s lifetime.
The key difference between this and Canada Life is that Just do not provide the Sipp into which the annuity is placed and purchased as a trustee investment.
The Just model involves them working with platforms to enable their Sipps to accept an annuity-style product purchase.
They have partnered with Spire Platform Solutions whose technology is developed to work alongside the platform’s technology provider and facilitate a lifetime income asset to be held alongside other Sipp assets.
LV= have brought together this idea but using their Fixed Term Annuity, which can be a trustee investment within the Flexible Transitions Account pension wrapper – the combined solution being the Retirement Account.
Pension Freedoms
The Pension Freedoms came as a surprise when they were announced, catching providers, and indeed the whole market, off guard and while it is obvious to suggest that annuities became less popular as a consequence it is important to consider the impact on the providers who specialised in the promotion of them.
Therefore, it is no massive surprise that the innovation in the retirement space saw names synonymous with the annuity market leading the charge to create solutions made up of drawdown alternatives and to introduce an element of protected income where needed.
The subsequent acquisitions and corporate activity in this provider space would indicate that these innovations and solutions will continue as valuable options in the retirement income landscape.
However, it would appear from our research that these products are looking to fill a gap that some advisers may consider is not there in so far as our survey results indicate that adoption is still evolving.
It is fair to say that true innovation requires not only the skill of the product manufacturer and designer but also the advice that a professional can give.
Advisers should consider that they already have options to outsource much of the investment journey, particularly in accumulation phases. Discretionary fund managers, multi-asset funds and model portfolios are just some of the ways that this is already done.
These products could fit into the same area as a solution outsourced by the adviser to the provider of the product.
Equally, they could form part of a centralised retirement proposition for advisers looking to segment their clients for the type of solutions that would be appropriate for each client segment.
