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Communications code

I feel like we are in the quiet before the storm. This will be published in the few days before the expected HMRC announcement on December 8. Whether we see radical change or not, there will undoubtedly be a level of change that will impact on provider systems and, as importantly, the communications and advice processes operated by advisers.

Any person designated within an IFA practice as head of operations will need to allocate a few days to ensuring that the new frameworks are being applied to new retirement enquiries. As importantly, the professional retirement adviser will also be communicating with all their existing income-drawdown clients to tell them what is going on and how this will impact on them. The consumer financial press will undoubtedly be jumping on the December announcement so the adviser needs to reaffirm the detail about the changes and, most importantly, what this will mean for the client.

While communicating with the client, I think it is also worthwhile drawing on industry research and information to reinforce the advice service and therefore value that can be offered from the adviser firm. This research typically costs a great deal of money to complete, yet is available to the adviser community at no cost, so it is just a matter of learning how to use it.

If I take the Sense Check at 60 report that has recently been produced by Sun Life Financial of Canada, we can draw from this a significant amount of information and transform this across into client communications.

’The issue is explaining solutions to the client in an effective and timeefficient way’

For example, we can see from this particular research, which was conducted with mass-affluent clients, 70 per cent of whom have an IFA relationship, that most people are expecting an income requirement of over £30,000 a year in retirement. In turn, we can see that the greatest concern from this group is inflation and no wonder with current RPI levels at 4.6 per cent.

There is now, of course, an increasing range of solutions available for the retiree from the lifetime annuity through to fixed term, investment-linked annuity and drawdown products with in-built guarantees. The issue is explaining these to the client in an effective and time-efficient way.

Certainly, the opportunity of investment-linked solutions offers a hedge against the damaging impact of inflation and existing drawdown customers will be familiar with the risks involved.

The research should reassure us that once explained, individuals find the investment-linked options attractive. The middle-market solutions are not overly complicated – we just need to reframe how we communicate them. When better to revise your approach than on the day that rules are going to change anyway.

Steve Lewis
Managing director
The Retirement Partnership


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