Scottish WidowsJul 19 2017

Scottish Widows launches pension income guide for advisers

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Scottish Widows launches pension income guide for advisers

Scottish Widows has published a guide to help advisers stay on the right side of the regulator when planning retirement income for their clients.

The provider’s centralised retirement proposition guide covers the ‘at retirement’ and ‘in retirement’ stages when a customer draws down their savings.

It looks at the retirement income fact-find, risk assessment, withdrawal options, investment strategy, and ongoing review.

In the foreword to the guide, Mark Polson, principal of the independent consultancy the Lang Cat, said the document should help advisers ensure they meet the requirements of the Financial Conduct Authority.

 "Inside are a whole host of interesting twists and turns which we know the regulator is taking a good look at.

"For example, what happens to attitude to risk in retirement? Does a risk level 4 portfolio pre-retirement equal a risk 4 later in life? Historic measures of portfolio volatility might not be the best proxy for all the different risks.

"There are business issues too – if your model relies on percentage charges of assets under advice, you’re looking at more and more work on a dwindling income stream.

"Our sector has had it easy in this regard for a while – affluent baby boomer clients cross-subsidise those who are further down the track.

"But that’s the thing about demographic bulges – they bulge and then they don’t. Right now we’re in a bulge – but it won’t last forever.

"And that’s before we get into what asset mixes to go for, multi-asset solutions against model portfolios against guaranteed options and all the rest of it."

Ronnie Taylor, director of distribution at Scottish Widows, said: “Pension freedoms have offered customers far greater choice and flexibility.

"However, this also means advisers are now taking on even greater responsibility for the retirement options they recommend, particularly when it comes to sustainable withdrawal strategies that aim to stop their clients running out of money.

"We have developed the guide to serve as an additional point of reference to help advisers meet the diverse needs of today’s clients.”