Retirement income firm Key Retirement is to close its pensions advisory business because of lack of demand.
The equity release and annuity broking specialist began building a team of advisers to work with clients on their pensions options prior to the 2014 Budget.
However, it has decided to scrap the service – which employed seven people including three advisers – because people in its target market of pots between £50,000 and £100,000 were unwilling to pay for advice.
Key Retirement technical director Dean Mirfin says: “Our core target market are very much under-served in terms of access to advice. Fundamentally they are shying away from wanting to pay for advice, or simply do not see the need for it where they have clear goals.
“As a result we have made the decision to scale back the business and to retain a smaller non-advised team.
“With the Treasury and FCA work under the Financial Advice Market Review the landscape for these customers and how they access best outcomes is still changing but many are comfortable with a non-advised service where this is to achieve a guaranteed income from an annuity.
“However, many looking to drawdown are typically low or no risk meaning the economies of transacting for such clients do not work.”
Members of the advice team affected are currently under consultation and will be redeployed in other areas of the business if possible, Key Retirement says.