Expert: Gemma Mitchell, Business Development Manager – Retail Intermediary Distribution, Standard Life Facilitator: Helen Clark, Owner and Director, Mint Blue Consulting
Headlines:
- The complexities of retirement income planning, particularly around client preferences for guaranteed income (like annuities) versus flexible drawdown options
- The need to understand clients' often-conflicting desires for both income security and flexibility.
- The wide range of retirement income products and whether the market offers too many or too few options to meet diverse client needs
- Concerns around provider service issues, including prolonged processing times and communication delays, which can create barriers in retirement planning
- The potential for AI and other technologies to improve service for clients with smaller pots
Discussion points:
Client attitudes and needs: balancing security and flexibility
Survey data revealed that clients often want both income stability and flexibility in retirement, which creates challenges in product recommendations. Advisers emphasised the need to explore client risk tolerance and personal circumstances thoroughly to identify the right balance.
Product suitability and innovation
The suitability of annuities, drawdown options, and blended products was discussed, with advisers advocating for a flexible approach that considers each client’s risk profile and financial objectives. The market's capacity for innovation, particularly in meeting unique client needs, was both praised and questioned.
Service challenges and the advice gap for smaller pots
Delays and inefficiencies in service from some providers were flagged as a barrier to effective retirement planning. The advice gap for clients with smaller pots was also addressed, with the group discussing scalable service models and pricing options that could make advice more affordable for this group.
AI and technology as tools for advisory efficiency
Technology, particularly AI, was seen as a promising tool to improve service for clients with smaller pots. Participants explored AI’s potential to support advice delivery for clients with straightforward needs and to enhance advisers' capacity to manage client data and streamline recommendations.
Key takeaways:
- Evaluate existing tools in the market for assessing clients' attitudes to risk, capacity for loss, and suitability for retirement income products. Identify opportunities for improvement or adoption of more comprehensive assessment tools
- Explore innovative service models and pricing structures to make retirement planning advice more accessible for clients with smaller pots. Consider the potential role of technology in delivering streamlined, cost-effective support for these clients
- Work with industry bodies and regulators to address delays in service from providers and to ensure compliance with guidelines around vulnerable client identification and ongoing advice requirements
- Evaluate AI and other tech tools for their potential to streamline processes, especially for clients with simpler needs or smaller pots. Focus on AI's role in automating assessments, managing data, and supporting advisers in providing tailored advice
- Stay updated on evolving regulatory requirements related to vulnerable client identification and the suitability of retirement income products, adjusting practices as needed to align with industry standards
