Just one in five (21%) professionals working in UK adviser firms believe product providers have responded well to the government’s recent pension reforms, according to a survey by adviser software specialists, Intelliflo.
The survey, compiled using responses from 227 users of Intelliflo’s Intelligent Office (iO) adviser software, showed around one in six (17%) believe providers have been slow to respond to the opportunities the new rules offer, although just under two thirds (61%) recognise that the industry was caught by surprise and it will take time for new products to be developed.
Asked about the role for annuities, almost a third (31%) say they will need to offer better value if they are to survive, while over a quarter (27%) believe they still have an important role to play in retirement planning. Around one in seven (15%) say they are outdated and need to be replaced by innovative new products.
The survey shows that almost three quarters (73%) believe that being able to take all money out of pensions will be of interest to many or some of their clients, with more than a quarter (26%) saying it will be of interest to many.
A third (32%) believes the changes make it more likely their clients will take the tax free cash from their pensions at a younger age than a few years ago.
Asked how that tax free lump sum might be used, just over one in 10 (11%) believe it will be invested in property, with almost one in three predicting it will be used to pay off debts (28%) or to improve their clients’ lifestyles, such as through holidays, new car, new household goods (30%).
Two in five (40%) reported increased business for their firm as a direct result of the government’s new pension rules.
Jo Gilbey, Intelliflo’s Marketing Director comments: “Our survey highlights the challenges faced by product providers in responding to the opportunities presented by the government’s new rules. While annuities still have a place, advisers are expecting new products that will offer alternatives to people who want more certainty around income during retirement.
“The survey also shows there is concern that significant numbers of people may not be able to resist the opportunity to spend their tax free lump sum well before retirement, leaving them with reduced funds to provide adequate investment to fund later life.”
Notes for Editors
The survey was carried out among Intelliflo’s adviser database during 27 October - 4 November 2014.
Intelliflo (www.Intelliflo.com) has been providing information technology services to financial services companies since its formation in 2004. Its leading web-based business management software, Intelligent Office, helps financial businesses large and small to improve efficiency and increase profits. Intelligent Office supports over 1,250 firms and 11,250 users with assets under advice of £172 billion (as at 30 September 2014).
In July 2013 HgCapital, a leading European private equity investor in B2B technology companies, became a majority shareholder in Intelliflo Ltd. HgCapital has a wealth of expertise in developing web-based software businesses and is committed to supporting the next phase of Intelliflo’s growth.
Intelliflo has won the Professional Adviser ‘Best Technology/Software Provider’ award, voted for by Financial Advisers, every year since 2010.
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