Do non-advised demands go too far, or not far enough?

Critics call for annuity sales to fall under the RDR, while others say advice is prohibitively expensive.

Response to recommendations by the Financial Services Consumer Panel to increase transparency of non-advised annuity sales and to include an option for advice have ranged from critics saying they are too onerous to those saying they are not extensive enough.

Yesterday, the FSCP reported findings which showed non-advised annuity sales are often marketed as ‘free’ but in fact pay 5 to 6 per cent commission, well above the 1.5 to 3 per cent average. The report also criticised a lack of any requirement to consider the ‘whole of market’.

The panel recommended the FCA undertake a complete overhaul of non-advised sales and introduce a code of conduct that would demand, among other things, that annuity providers be forced to offer an advised service as well as their traditional non-advised route.

Andrew Tully, pensions technical director, MGM Advantage said there is still a significant lack of awareness of the potential benefits of shopping around among savers approaching retirement, and that the annuity market as a whole needs a thorough overhaul.

To read the full article, please click here.


Source: FT Adviser

The rise of the non-advised channel

Ten months after the introduction of the Retail Distribution Review (RDR), and we are beginning to get the hard facts behind how the annuity market has changed, and how people are buying annuities through different channels.

The percentage of money coming through the advised segment of the market has been slashed from 61% last year to 37% for the first six months of this year. Instead more and more people are going through the non-advised route; up to 52% from 32% last year.

The rise in non-advised is partly because there are more annuity desks to choose from. Household names have recently launched offerings, and a lot of time and effort has been invested in these services.

To read more, follow this link

Too early to tell whether RDR has worked

Martin Wheatley, chief executive designate of new regulator the Financial Conduct Authority (FCA), has claimed it is 'too early to tell' whether the retail distribution review (RDR) can be judged a success.

Wheatley added that huge fines on banks do little to improve the behaviour of their staff, saying it would not matter if they were doubled or tripled

To read the full article from the New Model Adviser, click here.

Retail Investment and Retirement Solutions report

You could do a lot worse than get yourself a copy of the Retail Investment and Retirement Solutions report from Clear Path Analysis.

Legislation changes, particularly the Retail Distribution Review (RDR), National Employment Savings Trust (NEST) and Solvency II, in addition to the current economic market turbulence and future uncertainty are altering investors, advisors and product providers’ attitude and approach to the market place. This reinforces the need to stay abreast of the ever-changing outlook and ensure these changes create opportunities, not challenges.

‘Retail Investment & Retirement Solutions 2012’, is the second report in its series which looks at the evolution of the retail investment and retirement solutions sector and the preparation considerations as we draw nearer to the enforcement of regulatory changes.

Key topics:

• Adapting your business model and refining your fee structure for an RDR world
• Examining the impact of other regulations including NEST and Solvency II on the retail
investment and retirement solutions market place
• Considering the merits and suitability of certain retail investment products
• Evaluating methods of achieving income in a low interest rate environment and protecting portfolios against inflationary changes
• Evaluating the developments in the retirement solutions sector and which solutions to consider

RDR Toolkit Modules

MGM Advantage has produced a series of bite-sized modules to add to the RDR Toolkit, covering areas such as barriers to paying fees, overcoming objections, segmenting your client bank and more. Each module will be published on www.mgmadviser.com/rdr over the coming weeks.

Module 1: The effects of RDR on those advising individual clients on annuity and drawdown products.

Coming next...Module 2: Developing an advice proposition for retirement clients

Essential RDR Toolkit

The Retail Distribution Review (RDR) that comes into force on 1 January 2013 gives you the opportunity to reposition your business with prospective clients.

MGM Advantage has pulled together a toolkit to help you market your business, particularly to clients at the point of retirement. Including sales aids, case studies and a customer brochure, the toolkit spells out to clients why it is essential to take financial advice at retirement.

Commissioned jointly by MGM Advantage, Just Retirement, LV= the programme has been produced by a team of industry specialists each with complementary skills and practical experience of building a business and advising clients.

You can browse the toolkit contents on mgmadviser.com/rdr and order your free toolkits online.

Be quick while stocks last!