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SimplyBiz to launch retirement planning tool as FCA hones in

SimplyBiz to launch retirement planning tool as FCA hones in

SimplyBiz is to launch a retirement tool it claims will “blow advisers’ socks off” to help the industry navigate the decumulation market.

The support services company told FTAdviser it was working to create an all encompassing retirement income software in a bid to help advisers address the “Financial Conduct Authority’s clear concerns” around retirement income advice.

According to SimplyBiz, the tool, which is being developed by the firm’s recently acquired Defaqto, provides advisers with an end-to-end process for the advice given to those reaching or in the decumulation stage.

Neil Stevens, joint chief executive officer at SimplyBiz, said: “Using this tool, advisers can finish the job. In the same place, advisers can draw the model, research the products and the funds, pull all that together into a recommendation and print a client report.

“Usually, advisers are left pulling together a fragmented report from various sources. This is a knockout for advisers — it covers the process from start to finish, with quality at each step, and it hangs together properly.”

Using the cashflow part of the software, advisers can “extract the client mandate” — what the client’s income, capital and legacy goals are — and then use an actuarial model, provided by Hymans Roberston, to work out a cash flow for their client.

The process provides variables, such as the level of sequencing risk the client is willing to expose their retirement pot to, how much the client wants to leave behind and the ongoing income required, to show the adviser different scenarios based on different portfolios, risk levels and drawdown amounts.

Zahid Bilgrami, chief executive of Defaqto, said there was currently “nothing fit for purpose” to help advisers work with their clients in the decumulation phase and to navigate pension pots during drawdown.

He said: “In the absence of a proper tool, advisers are forced to use risk profilers which have been designed for accumulating pots. This is completely unsuitable.

“No other tools give a stochastically calculated sequencing risk projection for decumulation pots.”

The programme will then provide the adviser with a list of suitable funds, taking into account fees to work out a pounds and pence value of each option.

The tool, which is planned for launch in the first quarter of next year, will be available to all advice firms, not just those using SimplyBiz’s other services.

SimplyBiz’s plans come as the regulator cracks down on retirement income advice. In February, it asked firms for data on all such advice given over the past two years.

The sharp focus on retirement income advice suggests the FCA is moving its beady eye away from the defined benefit transfer market and towards the potential conflict of interest created in retirement income advice.

It is understood the regulator will look at the root causes of poor advice throughout the suitability review and that it is working from the starting point that poorly managed conflicts of interest can result in consumer harm.