Our friends at AKG recently produced a guide in association with Quilter Investors which considers retirement planning strategies in the post-pension freedoms era. The guide is designed to encourage advisers, planners and paraplanners to look deeper at core retirement planning considerations, processes and solutions with the benefit of considerations from the initial experience and developments post-pension freedoms.

The guide is underpinned by fresh market research findings which sought to ascertain adviser behaviours, approaches and thoughts on key items pertaining to retirement planning considerations and processes.

The guide is absolutely worth a read as it seeks to explore the following:

» Have you given your retirement planning proposition enough thought?

» Does your retirement planning proposition reflect the impact of pension freedoms on the market and the changing profile and requirements of customers?

» Are you giving due consideration to the regulatory direction of travel?

» Does the proposition differ from your accumulation approach?

» How does it deal with the transition between accumulation and decumulation?

» What are the core retirement planning and investment risks that you are trying to help your customers understand and mitigate?

You can download the full guide here but the section on regulatory direction of travel in particular, caught our eye and is quoted from here on.

In June 2018 the FCA published the final findings of its Retirement Outcomes Review and whilst there is a clear focus on issues pertaining to non-advised customers, there is some read across to the advised sector as follows:

The FCA wants customers to be encouraged to, and supported in, shopping around for both annuities and drawdown solutions.

Adviser read across – A key role for the adviser, once client circumstances, needs and requirements have been ascertained, is to source suitable product/investment solutions from the range available to them in the market.

The FCA wants customers to get a good deal and value for money from drawdown solutions. Concern is raised about the total level of cost that may be experienced and the potential impact of these costs on drawdown outcomes over time.

Adviser read across – As part on the product/investment solutions sourcing process, advisers appraise and assess the relevant charging structures to seek a competitive deal for their client. Competitive forces in the drawdown market along with regulatory focus are likely to bring cost pressures to the drawdown value chain.

The FCA wants retirements risks flagged earlier and more clearly to customers and suggests associated changes to the retirement wake-up pack issued by providers.

Adviser read across – A key role is in addressing key retirement risks for the client. Advisers might wish to consider how they do this earlier in the engagement process for clients.

The FCA wants customers to be better engaged with investment decisions and direction in drawdown.

Adviser read across – Advisers place great store by working on investment strategy for clients. Whether working on their own investment proposition or in collaboration with third party investment specialists, advisers need to ensure clients are engaged in the investment process and its associated considerations.

The FCA is concerned about over exposure to cash in drawdown portfolios, particularly where customers have been defaulted into cash in the absence of engagement with investment decisions, and the subsequent impact on the investment performance of the drawdown portfolio.

Adviser read across – Advisers should consider their approach to cash allocation for clients, its application where relevant and the potential impact on the drawdown portfolio.

Once in drawdown the FCA wants customers to continue to be supplied with information and support on a regular basis, including consideration and review of their chosen investment pathway.

Adviser read across – Advisers need to ensure they have a strong ongoing review service for their drawdown clients including ongoing exploration of decumulation investment strategy.


This article was created for the DISCUS website following the release of AKG’s Planning Guide 2018. You can download the full guide here or find out more about AKG by visiting their website.