Aviva Wrap is developing a phased income drawdown facility on its Sipp in a bid to break into the UK platform market.
It has been working on the feature since Aviva set up its wrap in January. It is expected to launch the facility early next year.
Head of individual pensions and platform Nicholas Burton says: “We think one of the biggest markets for platforms is the at-retirement market. There will be a massive spike in people turning 65 over the next five years and there is also a trend for increasing wealth. For the next five years and beyond, we see an enormous opportunity for income drawdown on Sipps.”
The income drawdown feature will include online tools and scenario planning to help advisers with the income drawdown advice process.
Burton says: “The drawdown process is very labour-intensive and very costly and we are aiming to make that process simple. We think this is the way for us to penetrate the UK platform market.”
Other providers are also looking at the at-retirement market.
Aegon UK chief executive Otto Thoresen told Money Marketing last week: “If you look at the numbers tied up in the at-retirement area, you are talking about billions and billions of pounds worth of assets that are flowing through.” He says the funds involved have to be managed through to income, presenting a business opportunity .
Fidelity International head of UK fund partners Ed Dymott predicted in June that the platform market will shift towards the post-retirement market, with providers offering more income drawdown rather than accumulation of assets.