Expert: Lesley Whyte, Head of Strategic Partnerships, Standard Life Facilitator: John Lappin, Consultant
Headlines
- Clients show a strong desire for both guaranteed income and flexibility in retirement, sparking discussions on balancing these competing needs through innovative product combinations
- Rising client interest in annuities highlights the importance of guaranteed income, with calls for more adaptable annuity products to meet diverse preferences
- Bridging the financial literacy gap is essential, particularly for younger and less affluent individuals, through structured education programmes
- Wealthier clients and mass-market clients face unique obstacles in retirement planning, underscoring the need for tailored advice and accessible guidance
Discussion points:
Demand for guaranteed income vs. flexibility
Most clients want both guaranteed income and the flexibility to access their funds or pass on wealth, creating challenges in product design.
Advisers use a combination of products to try to meet these diverse needs, suggesting a strong demand for new approaches to balance certainty and adaptability.
Role of annuities and product innovation
Current interest rates make annuities appealing for clients wanting secure income. Fixed-term annuities are frequently recommended for those seeking a structured income without long-term commitment.
The discussion highlighted a gap in the market for flexible annuity options, with delegates calling for regulatory support to enable innovative product development.
Financial education and guidance
Financial literacy remains a major challenge, especially among younger and less affluent individuals who often lack the knowledge to make informed retirement decisions.
Structured educational programmes, possibly via employers or digital platforms, could help bridge this gap, with coaching and guidance considered viable solutions to support individuals without regulated advice.
Segment-specific challenges in retirement planning
High-net-worth individuals require personalised advice that aligns with their specific risk tolerance and financial goals.
For those with limited savings, the focus shifts to managing expectations, accessible guidance, and understanding the implications of decisions like accessing tax-free cash.
Key takeaways:
- Encourage innovation in retirement products, such as flexible and fixed-term annuities, to better serve diverse client needs
- Develop structured programmes, potentially delivered through employers or digital channels, to improve financial literacy among younger and less affluent individuals
- Partner with advisers, providers, and technology firms to improve access to advice and drive the adoption of innovative retirement solutions
- Push for regulatory changes that enable affordable guidance and coaching services, especially for clients with limited retirement savings
- Conduct additional studies to understand client needs better and develop tailored strategies for different client segments in retirement planning
