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Press comment: FCA publishes Terms of Reference for the Retirement Outcomes Review

14/07/2016

The following press comment has been distributed to our trade and national press contacts this morning following the FCA’s publication of the terms of reference of its Retirement Outcomes Review.

The terms of reference state the review will also look at non-advised customer journeys and notes that “there are also now higher numbers of consumers entering income drawdown products without use of a regulated adviser. [Figure 4 shows that] for the period October to December 2015, 32% of reported drawdown sales were not associated with a regulated adviser. In the Retirement Income Market Study, we noted that in 2013, 97% of new income drawdown sales were sold through advice services.”

Jon GreerJon Greer, pensions technical expert at wealth manager Old Mutual Wealth, comments:

“Non-advised drawdown is a relatively new phenomenon. Before the pension freedoms were introduced in April 2015 there was effectively no such thing, and a customer also needed to have a secure retirement income from other sources before they could even consider the type of drawdown flexibility on offer today. As the rules have changed it is entirely right that the FCA is looking at how customers come to their decision to take their retirement income in this way.

“Drawdown can be a very tax-efficient method of securing a retirement income, provided customers choose the most appropriate strategy for their needs and circumstances.

“The new normal for retirement income is about choice and it is vitally important that customers understand their choices before they make them. We firmly believe that receiving full professional financial advice is the best way to achieve this. Our research with YouGov shows that 60% of those aged 50-75 who have never seen an adviser suggest they have little or no understanding of drawdown. This falls to 38% if the respondent saw a financial adviser to plan their retirement.

“40% of those who have never seen an adviser state they have no understanding of drawdown at all. This figure is more than halved (18%) if they saw an adviser.”

 

 

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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