Few people are given a blank canvas and a wad of cash and told to design a successful business. The Retirement Adviser head of financial planning Nick Flynn is one and, a year on from launch, the business is thriving.
Flynn started his career at Prudential, “as everyone does in Reading”, before moving to IFA firm Wentworth Rose in 2000. Following its acquisition by Aegon, the firm was merged with four other practices to create Origen a couple of years later and Flynn was promoted to the role of head of retirement services.
At last year’s Money Marketing awards, he got chatting to the heads of national IFA firm LEBC, Jack McVitie and Nigel Stallworthy. LEBC did not have a specialist team in the retirement market but had seen it as an obvious area for expansion.
Flynn clearly made an impression on the pair as shortly after they gave him “an offer that was too good to resist”.
“Jack and Nigel knew what I had done at Origen and Wentworth Rose and, to cut a long story short, they offered me the chance to set up afresh with their full support and backing. It was a real blank piece of paper. They told me to find myself an office, find myself staff and said we will help you where we can and they have.”
Since its launch in September last year, The Retirement Adviser has doubled its staff numbers to eight and signed up a number of high-profile introducers, including Clydesdale and Yorkshire banks. It is expecting more deals to be signed off before Christmas.
Aside from brokering such agreements, the day job sees Flynn bagging his clients the most appropriate, best value retirement products available and he is pressuring the industry to make this the rule rather than the exception.
He is pleased with the progress of the Association of British Insurers’ Options’ initiative to speed up annuity vesting but believes there is a long way to go.
“The will differs dramatically from provider to provider. Annuities rolling over are the cash cows for a lot of these companies. If they can offer a rate that is off the pace and get it accepted it is easy money for them and I cannot see that changing unless someone makes them. I think Options is brilliant and is a step in the right direction but the idea that people move their pension to the most suitable place at retirement is a mindset that needs to be ingrained in the consumer, the adviser and the providers. We are far from there yet.”
Flynn is also concerned about the low level of enhanced annuity sales. The firm found 65 per cent of its clients qualified for an enhanced annuity between January and August this year, compared with the market average of 5 or 6 per cent.
Flynn says a radical change in how medical conditions are tackled is needed.
“It is simply down to asking the right questions. Rather than asking people if they are healthy, we ask what medication they are on. You need to assume everyone has some sort of issue and then discount them if they do not. All it takes is to drink a bit too much or smoke or be on some sort of medication. It makes such a difference and clients are so impressed, they think you are a genius.”
Third-way products, particularly fixed-term annuities, have recently been the talk of the retirement market. LV= is working on new products and Aviva has also expressed a strong interest in the fixed-term market and Flynn says the interest from providers is good news.
“More providers coming into the market is a real advantage and it is even better that some of those are extremely well known names.
Flynn says they are happy to recommend variable products when appropriate but they have been held back by concerns over charges and the increase in take-up of enhanced annuities.
“I think these products have suffered as a result of the success of enhanced annuities over the past three to four years.
“Living Time is a particularly interesting product for people who have a minor health condition that may turn into something more serious in 10 years time. That is definitely an avenue worth exploring and it is a market that will definitely grow as more brands move into that area.”
Solvency II will also help such alternatives flourish, says Flynn. The current proposals could slash annuity rates by as much as 20 per cent and while there is a good chance that the final regulations will be watered down, there is still likely to be a downward pressure on rates.
“If Solvency II develops, the annuity market could suffer dramatically which will drive people to look for alternatives. I think that may be the catalyst for people to shift away from conventional annuities and look for something else. It could even create a run on annuities.”
With regard to the other massive regulatory change under way, the retail distribution review, Flynn is feeling pretty relaxed.
He says a lot of the RDR is welcome, particularly the emphasis on the difference between different channels of advice but he thinks the proposals will make little difference to the firm. “We are very fortunate that LEBC has a strong fee model so have a headstart on that. In terms of qualifications, all of our guys are either diploma-qualified or all but there so on that side of things we are ery comfortable.”
But he is sceptical that the FSA will meet the current timescale with a general election around the corner.
He says: “A-Day was delayed and that only related to pensions. This is something far wider ranging than that. Two and a half years is quite ambitious, particularly in a climate that is as difficult as it is at the moment or has been for the past 18 months.”
Away from the office, Flynn is a keen scuba diver and teaches beginners every Tuesday evening. He has dived with sharks and won an underwater photography competition for some of his snaps earlier this year.
“Scuba diving is a big part of my life. My favourite place to dive is Borneo where there are loads of sharks and turtles. I like diving with sharks as long as they are not too big. In Eqypt, there are really big sharks and they are curious too which is pretty intense.”
After a fairly intense first year, Flynn and the Retirement Adviser are well on their way to becoming big fish in the world of retirement.
Lives: Reading, Berkshire
Education: Brunel University, Strategic Marketing BA (Hons), Dip PFS.
Career: 2008-present: director of retirement planning, The Retirement Adviser (LEBC Group); 1999-2008: IFA/pensions consultant to head of retirement services, Wentworth Rose/Origen; 1995-99: Prudential
Likes: Rugby, skiing and scuba diving
Dislikes: Lazy people
Book: Anything by Clive Cussler
Film: Top Gun
Album: Anything by The Killers and INXS
Career ambition: To help make the open market option compulsory, too many people miss out currently.
Life ambition: To see more of the world
If I wasn’t doing this I would be…..Teaching people to dive somewhere warm