Just Retirement has launched a simplified advice service for people with smaller pension pots in a bid to bridge the “advice gap” left by the RDR.
The firm is offering the service initially through pension providers. Customers will be given personal recommendations over the phone on how to use their pension pot, including whether to keep their funds invested, take lump sums, generate an income stream or defer taking benefits.
The provider previously signalled it was exploring a white labelled simplified advice proposition for use by advice firms and in February it launched a simplified platform, allowing customers to purchase annuities while also leaving some money invested in a “rainy day” fund.
Just Retirement director Stephen Lowe says the service is aimed at customers with “straightfoward needs”, rather than people with guaranteed annuity rates or other substantial assets, and average-sized pension pots. Fees for the service have not yet been disclosed.
Lowe says: “While wealthier pension savers tend to seek professional advice which helps them understand their choices and make good and often more complex financial planning decisions, the concern is for the majority of middle Britain savers with more modest pensions who are often less engaged with the process and feel excluded from advice.
“Pension companies are already showing interest in the new service. By offering advice in this way it transfers the conduct risk to us and ensures their pension savers are given the chance to share in the benefits of ‘freedom and choice’.”
The FCA’s final paper on simplified advice, published in January, was slammed by experts who said it did not sufficiently address the barriers to entry for firms interested in the market.