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Advisers on pension freedoms: 10 findings from huge survey

In the first gallery plotting the results of the huge AKG pension freedoms report, advisers give their views on what affects their businesses the most at the moment.

The report

AKG has issued an extensive report about the pension freedoms in association with insurance giants Standard Life and Prudential.

The conclusions are based on several tranches of data gathered in February and March this year:

  • Qualitative research among financial planning businesses. A telephone-based research exercise was carried out on behalf of AKG by Widewater Consulting. The research fieldwork included a series of 25 'in-depth' phone interviews, and was undertaken with firms of financial advisers over the four weeks from 12 February 2018.
  • Citigate Dewe Rogerson also carried out an online market research exercise  on AKG's behalf with over 100 financial advisers. The research took place between 6 and 22 March 2018.
  • Quantitative research among consumers, in the form of an 'online market research exercise' by Consumer Intelligence. The research was carried out on 15 March 2018 and the research sample consisted of 1,082 consumers aged 40 and above.

Click on to read the key conclusions from the questions asked to advisers.

Keep your eyes on our website for the consumer results later. 

The report

AKG has issued an extensive report about the pension freedoms in association with insurance giants Standard Life and Prudential.

The conclusions are based on several tranches of data gathered in February and March this year:

  • Qualitative research among financial planning businesses. A telephone-based research exercise was carried out on behalf of AKG by Widewater Consulting. The research fieldwork included a series of 25 'in-depth' phone interviews, and was undertaken with firms of financial advisers over the four weeks from 12 February 2018.
  • Citigate Dewe Rogerson also carried out an online market research exercise  on AKG's behalf with over 100 financial advisers. The research took place between 6 and 22 March 2018.
  • Quantitative research among consumers, in the form of an 'online market research exercise' by Consumer Intelligence. The research was carried out on 15 March 2018 and the research sample consisted of 1,082 consumers aged 40 and above.

Click on to read the key conclusions from the questions asked to advisers.

Keep your eyes on our website for the consumer results later. 

What are the biggest areas of concern for your business in 2018/19? (Part 1)

A Regulatory change/challenge 77%
 
 
B Investment volatility 59%
 
 
C Political volatility 47%
 
 
D Capacity/resources 28%
 
 
E Professional indemnity cover 18%
 
 
F Recruitment of advisers/paraplanners 12%
 
 
 

What are the biggest areas of concern for your business in 2018/19? (Part 2)

A Insistent clients 11%
 
 
B Vulnerable clients 7%
 
 
C Competition for your business from others 7%
 
 
D Developing new paraplanners/advisers 6%
 
 
E Capital for the development of your business 2%
 
 
F Other 4%
 
 
 

What do you think is the biggest risk of doing DB transfer advice? (Part 1)

A Risk of future client complaints 29%
 
 
B We do not do DB transfer advice 24%
 
 
C Risk in change of regulatory view from FCA 16%
 
 
D Risk of client's family seeking compensation 10%
 
 
 

What do you think is the biggest risk of doing DB transfer advice? (Part 2)

A Mis-selling by minority affecting my FSCS levy 7%
 
 
B Lack of PI insurance 4%
 
 
C Client has made up his/her mind before seeing me 3%
 
 
D Other 6%
 
 
 

What do providers need to focus on to be successful with advisers in the pension freedoms market? (Part 1)

A Service delivery standards 58%
 
 
B Range of product/fund solutions 54%
 
 
C Financial strength/sustainability 48%
 
 
D Digital/online capability 45%
 
 
E Technical support on tax and pensions 33%
 
 
F Range of retirement planning tools 14%
 
 
 

What do providers need to focus on to be successful with advisers in the pension freedoms market? (Part 2)

A Sales support 11%
 
 
B Innovation 10%
 
 
C Brand 6%
 
 
D Cyber/data security 6%
 
 
E Assistance with tools/information for DB transfer 4%
 
 
 

What do providers need to focus on to be successful with advisers in the pension freedoms market? (Part 3)

A Field salesforce 3%
 
 
B Scale 0%
 
 
C Other 2%
 
 
 

Which type of providers will flourish in the pensions and retirement market? (Part 1)

A Platform operators 81%
 
 
B Sipp operators 52%
 
 
C Discretionary fund managers 30%
 
 
D Life companies 29%
 
 
E Asset/fund managers 25%
 
 
F Specialist tax product providers (BPR/EIS etc) 18%
 
 
 

Which type of providers will flourish in the pensions and retirement market? (Part 2)

A Technology players 15%
 
 
B Friendly societies and mutual insurers 5%
 
 
C Banks/building societies 4%
 
 
D Robo-advisers 4%
 
 
E New market entrants 4%
 
 
F Other 4%
 
 
 

How happy are you with the level of innovation from the market in response to the pension freedoms? (Part 1)

A I am not at all happy with the level of innovation 3%
 
 
B I am moderately unhappy with the level of innovation 19%
 
 
C It has been satisfactory 58%
 
 
D I am moderately impressed 16%
 
 
 

How happy are you with the level of innovation from the market in response to the pension freedoms? (Part 2)

A I am extremely impressed with the level of innovation 3%
 
 
B I don't know 1%
 
 
C Unhappy overall 22%
 
 
D Happy overall 18%
 
 
 

Where would you most like to see further development in the retirement market during 2018/19? (Part 1)

A Drawdown products 46%
 
 
B Guaranteed capital/income solutions 31%
 
 
C Cost of products/fund/portfolios 22%
 
 
D Digital/online capability and functionality 25%
 
 
E Value of products/funds/portfolios 24%
 
 
F Long-term care products 20%
 
 
 

Where would you most like to see further development in the retirement market during 2018/19? (Part 2)

A Annuity products 18%
 
 
B Inheritance tax products 16%
 
 
C Investment funds/portfolios 15%
 
 
D Platform income solutions 14%
 
 
E Retirement planning tools 14%
 
 
F Transparency of terms and conditions 11%
 
 
 

Where would you most like to see further development in the retirement market during 2018/19? (Part 3)

A Regulation 8%
 
 
B Equity release products 7%
 
 
C Robo-advice solutions 3%
 
 
D New market entrants 1%
 
 
E Other 2%
 
 
 

What is your approach to constructing drawdown investment portfolios for clients?

A Portfolio construction/management is done in house 44%
 
 
B Portfolio construction/management is outsourced 25%
 
 
C Combination of both 31%
 
 
 

What is your approach to constructing drawdown investment portfolios when you at least partly outsource the service? (Part 1)

A Multi-asset funds 53%
 
 
B Discretionary fund managers 42%
 
 
C Managed portfolio services 37%
 
 
D Multi-manager funds 35%
 
 
E Risk rated funds 32%
 
 
F Risk targeted funds 31%
 
 
 

What is your approach to constructing drawdown investment portfolios when you at least partly outsource the service? (Part 2)

A Bespoke portfolio service 23%
 
 
B Fund research/rating houses 16%
 
 
C Asset/fund managers  11%
 
 
D Investment consultants 3%
 
 
E Other 4%
 
 
 

Do you see a future for 'smoothed' product/fund solutions? (Part 1)

A Yes and we regularly advise on this 17%
 
 
B Yes and we sometimes advise on this 32%
 
 
C Maybe but solutions need to improve 35%
 
 
D Maybe but economic conditions need to change 6%
 
 
 

Do you see a future for 'smoothed' product/fund solutions? (Part 2)

A No, these solutions are too costly 6%
 
 
B No, clients do not understand they can still fall in value 4%
 
 
C Yes overall 49%
 
 
D No overall 10%
 
 
 

Do you see a future for guaranteed product/fund solutions? (Part 1)

A Yes and we regularly advise on this 5%
 
 
B Yes and we sometimes advise on this 18%
 
 
C Maybe but products need to improve 40%
 
 
D Maybe but economic conditions need to change 9%
 
 
E No, these solutions are too costly 13%
 
 
 

Do you see a future for guaranteed product/fund solutions? (Part 2)

A No, clients do not understand them 0%
 
 
B We need more blending of guarantees with investments 14%
 
 
C Those in favour overall 23%
 
 
D Those opposed overall 13%
 
 
 
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