Peter Bradshaw, National Accounts Director at pensions and investment planning analyst Selectapension, says that adviser demand for information on income drawdown has been booming in the last three years
At Selectapension, we have witnessed numerous changes in how advisers approach pension planning in the past year. The impact of RDR, low annuity levels and clients becoming more tuned in to their finances has led to advisers taking more notice of the at-retirement phase. This, in turn, has led to advisers increasingly looking to income drawdown as a viable option for their clients’ retirement.
Our system data reveals a surge of advisers using Selectapension’s income drawdown calculators in the past two years. From the beginning of 2011, we have seen a 160% increase in advisers investigating income drawdown for their clients. This suggests that advisers are becoming very disillusioned when it comes to annuities and income drawdown is a real option for retirement.
This data may not be surprising to the adviser community. Low gilt yields over the past 12 months have left annuities at extremely low levels. Hence our data shows that the change in the GAD rate in March 2013 sparked drawdown activity by advisers. However, further changes throughout 2013 have not created distinct peaks in adviser interest. Instead we have seen a steady rise in drawdown activity, which certainly suggests advisers are paying more attention to the at-retirement stage for their clients.
The increased interest in income drawdown may also be due to the 2012 legislation on gender neutrality. Women particularly benefitted from better income drawdown rates and we have seen an 84% increase in advisers analyses of cases for female clients in the past year.
Technology is now a vital tool for advisers to ensure they are on top of their clients’ pension planning and are recommending the best investment choices possible. Having the right tools in place also helps save time and ensures all investment analyses are recorded for review and compliance purposes.
