The lang cat conducted in-depth conversations with adviser firms across the UK, exploring the market trends and pressures that they are currently facing. Central to discussions was whether firms’ retirement proposition for investment is different from their pre-retirement proposition.
What emerged was a picture of key priorities for the foreseeable future; what advisers are looking for from technology providers, and in particular, platforms; what are the most important conversations they have with their clients; and how they see demands on their own advice and expertise changing in the coming years.
Five key themes emerged, which resonated across all conversations:
Client relationships: Whilst technology and investment philosophy are important enablers, at the heart of everything lies the relationship between advisers and their clients
Client segmentation: There are a variety of investment philosophies being used, since clients each have individual aims and needs. Advisers are seeking to create segments that unite customers by more than just the value of their investable assets
Getting the basics right: Pay clients when they expect it, and make it as simple as possible
Flexible technology: Increasing divergence in client needs means technology must be flexible
Integrated technology: In a sector where Adviser firms are typically running five different standalone systems – necessitating repeated re-keying of data - the ability to integrate is vital.
The retirement market has seen huge changes in recent years, both in the sheer number of external factors – the decline of DB pensions, auto enrolment driving more saving but arguably not at a high enough level, state pensions moving further into the future for most people and set to continue this trajectory, increasing longevity - and consequently in the impact we have seen on the decline in annuities and the rapid rise of drawdown.
Alistair McQueen, Head of Savings and Retirement at Aviva, comments: “This research gives us a great insight into the main concerns facing advisers in navigating their clients through post-retirement, and poses several important questions for us to consider.
“Chief amongst these is how we can continue to use and improve technology to underpin the central relationship between an adviser and their client. This is both in terms of the service the client ultimately receives and in creating efficiencies, whether through integration or administration, which will allow more productive conversations.
“It’s also clear that future client needs will demand more, rather than less, flexibility as their circumstances change, and this speaks directly to what will be expected of providers in supporting these discussions.”
Steve Nelson, Consulting Director, the lang cat, said: "The main theme that ran through each of our adviser conversations was that the client relationship trumps all and that technology should be used to enable this relationship as easily as possible. This is absolutely nothing new in our many interactions with the adviser community, but it’s great to see it reaffirmed once again.
“However, currently, an army of advisers, paraplanners and admin staff across the UK carry most of the burden of making systems work on behalf of their clients. We remain disappointed but not surprised at the amount of sheer effort it takes to properly integrate the different systems they use in the process of giving advice, building portfolios, creating good disclosure documents and managing clients. This doesn’t feel right in 2020.
“Advisers need to shout loudly about what they need from providers, and providers in turn need to understand that it’s in their interests to make life as easy as possible for them. There is no good alternative to getting this right.”
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