Pensions Intermediaries - UK - January 2010
This report provides an overview of the key issues facing pension and retirement income intermediaries. By drawing on a range of trade, consumer and desk research it examines the impact of the evolving regulatory environment as well as changing market conditions. The final section of the report presents the finds of Mintel’s exclusively commissioned IFA survey, conducted by NMG.
- Although the FSA’s determination to raise qualification standards for advisers by the end of 2012 will continue to push many smaller advice firms out of business, it will finally establish advisers as a trustworthy profession. Firms that raise their own standards sooner than later will be best placed to win new business.
- The demise of traditional workplace pension provision will increase demand for individual pension products and advice. As of January 2010, just five FTSE 100 companies continue to offer new employees final salary pension schemes.
- Pension intermediaries could be making greater efforts to indentify and encourage individuals with significant levels of protected rights funds to transfer their money into a SIPP. There is an estimated £100 billion (£60,000 per person) in accrued protect rights funds now eligible to be transferred into any type of SIPP.
- While many are speculating that the FSA’s goal to eliminate commission bias will result in more IFAs targeting the high-net worth (who can best afford paying adviser fees), there are only a limited number of HNW to go around. Advisers will be much better off targeting the larger middle section of the market with an affordable proposition.
- The fees charged for independent advice (currently ranging from between £75 to £250 per hour) need to be made more affordable in order to ensure wider access to truly independent advice. According to research sponsored by Aviva, just 3% of consumers are willing to pay over £100 per hour for independent advice while 17% would pay £25 per hour.
- The 2012 launch of the National Employment Savings Scheme (NEST) will greatly increase pension participation in the UK. Pension advisers should welcome this as they should benefit from more demand for retirement planning advice.
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