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Aviva eyes safety features for non-advised drawdown


Aviva is exploring the addition of automatic functions that aim to protect the first wave of non-advised drawdown customers.

The UK’s largest life company launched a direct-to-consumer platform in June following the introduction of the pension freedoms, which have seen thousands of people engage with non-advised drawdown products.

Experts have warned that customers entering drawdown without advice risk running out of money in falling markets.

Aviva head of financial research John Lawson says: “I expect people will make poor decisions, invest in the wrong things and run out of money early. Firms in the long term can help customers by having rule bases in place, like they do in the States.

“The crudest form would be a 4 per cent withdrawal rule. But there are more sophisticated models that allow you to withdraw as much as you like but, in certain circumstances, such as a 10 per cent market fall, your income would be reduced unless it was overridden.”

In March, Money Marketing revealed Aviva had scrapped plans for a phone-based guidance service following the FCA’s final guidance on simplified advice.

One of the aims of the Treasury’s Financial Advice Market Review is to “give firms the regulatory clarity and create the right environment for them to innovate and grow”. A consultation on the proposals closes in December.


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FCA raises non-advised drawdown concerns

The FCA says it will consider “stepping in to break the link” between providers and retirement decisions if there is evidence consumers are not shopping around for drawdown products. Speaking at the Westminster Employment Forum in London last week, FCA director of competition Mary Starks said: “We’re very conscious that if we see a significant […]


Tenet to charge to approve drawdown cases

Tenet is charging advisers £150 to carry out file checks on drawdown cases. TenetConnect, the investment and pensions division of Tenet, says it has seen an 86 per cent increase in drawdown cases between April and September. The network requires a pensions specialist to assess whether a drawdown recommendation is suitable before the sale. Tenet […]


FCA to review non-advised drawdown over charges concerns

The FCA is to review pension freedoms advice and non-advised drawdown as part of a raft of studies over the next year. Speaking at the Institute of Financial Planning’s annual conference in Newport today, FCA senior technical manager Rory Percival set out the regulator’s areas of focus in the pension freedoms space. He said the FCA […]


Can annuity/drawdown packages serve the mass market?

Specialist annuity providers are set to launch advised-only hybrid drawdown products, but experts warn they may struggle to reach their target markets. Since the 2014 Budget firms reliant on annuities have seen sales crash and profitability plummet. Figures published by the FCA in September showed out of around 200,000 people who accessed their pensions in […]

Protecting long-term savings from short-term policy

By Jamie Clark, Business Development Manager The pensions revolution is almost upon us. As with any revolution, there will be winners and losers. The winners in this case could presumably be the politicians that orchestrated pensions freedom and choice just before the general election. As for the losers, there may be many thousands of people […]


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