Aviva is launching an abridged advice service to help savers who are considering to transfer out of their defined benefit pension.
The abridged advice service, announced this morning (November 16), will operate via the Aviva Financial Advice service and will focus on planning and "fully understanding savers’ needs" in order to help them decide whether or not they need to proceed to full advice.
The provider said the service will help to bridge the advice gap in the UK, where 30 per cent of adults aged 55 or over need financial advice, but are unable to afford it or simply cannot get access to an adviser.
Mary Harper, managing director of Aviva Financial Advice, said: “Previously, if someone came to us to ask about the suitability of transferring their DB pension, they would have to go through the whole advice process even if the recommendation at the end was not to transfer.
“Offering abridged advice means we can take customers through a much simpler process to understand if transferring is not the right thing for them in the first instance.
“More broadly, we understand the different levels of support that people need – from information gathering to full advice - and we’re tailoring our proposition so that a broader set of customer needs can be met.”
Abridged advice sits in between triage and full pension transfer advice but can only result in a personal recommendation to not transfer out of a defined benefit scheme.
First mooted by the Financial Conduct Authority in a DB transfer paper in July 2019, abridged advice begins with an introductory chat with the client, where the adviser can get some high-level information about their circumstances in order to determine that they are not a viable candidate for a transfer.
It launched on October 1 this year to a frosty reception, with questions over the level of uptake and concerns it would increase consumer confusion.
Abridged advice is an attempt to allow consumers access to advice surrounding DB transfers now the contingent charging ban is in place. The FCA hopes it will filter out those consumers for whom a pension transfer is unlikely to be suitable before they pay for full advice.
Simplified advice
Aviva is also looking into a ‘simplified advice’ offering, which will help those with less complicated affairs get access to a lower cost form of advice.
Ms Harper said: “We’re also looking into a ‘simplified advice’ offering - providing advice to customers who have a much simpler set of requirements, such as ‘am I in the right funds?, should I bring two pensions together?, or how can I maximise employer contributions?’.
“We’ll provide this through a simpler digitised model at a lower cost, which we can offer through online triage and fact-finding, with an adviser touchpoint (typically phone-based) at the point of decision-making.”
This comes after many advice processes have been impacted by social distancing restrictions during the Covid pandemic, and the industry has seen the introduction of more digitised processes and a departure from the traditional face-to-face client meetings.
Ms Harper added: “We don’t believe advice will be 100 per cent face-to-face in the future – the experience is already becoming much more digitised and designed around what works best for each individual customer.
“We’ve already digitised many of our processes during the pandemic and will continue to do so going forward.”
amy.austin@ft.com
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