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IFAs see growing market for third-way products

Nearly two out of five IFAs say they will advise clients to use guaranteed third-way products as an alternative to traditional annuities in the next year, says MetLife Europe.

The company’s research also found that 48 per cent of advisers expect to sell more guaranteed pension products over the next five years as the retirement income market changes.

MetLife’s survey reveals that half of respondents believe too many pension investors are using conventional annuities rather than drawdown products, variable annuities or unit-linked guarantees.

Strategic development and marketing director Dominic Grinstead says: “Advisers are reporting increasing interest in guarantee-type products and are recommending them more often as they recognise that changed circumstances require changes in products.

“Unit-linked guarantees fulfil an important part in the product suite that IFAs can offer clients who are planning for retirement. Guaranteed products provide an excellent solution by giving exposure to equities and offering the safety net that investors are increasingly looking for.”

Alexander Forbes Financial Services technical and product development manager Jarrod Parker says: “Third-way products will be a growth area but people who do not go for advice when they reach retirement are not aware of all the options and tend to take their annuity with their pension scheme provider.”

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