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Partnership plans web tools to compare income options

The Retirement Partnership is drawing up comparison tables to allow advisers to make simple comparisons between annuities, drawdown and third-way products.

The group has already produced tables for annuities and drawdown but it is also testing data from third-way and alternative retirement product providers, including The Hartford and Lincoln.

Speaking at the Money Marketing at-retirement round table, The Retirement Partnership director Steve Lewis said: “You can get a table on our website for the best rates on the market for each of the variants, including fixed-rate annuities and drawdown. You have a page of numbers to start to have a look at. That allows you to start a conversation with your client.

“With the tables, a client can see the difference between a level no-widow’s-benefit single-life annuity and an inflation-linked annuity with two-thirds spouse’s pension.

“We are setting up the data tables for The Hartford and Lincoln. It will not be long.”

Asked about the state of comparison tools, Living Time sales and marketing director Dave Harris said: “I think rather than wait to get it precisely right, we are at the moment getting it precisely wrong but there are already great strides being made by The Exchange. A few years ago, it was showing the best-priced annuity but now it is showing how a fixed-rate annuity compares with that.”

Lewis also warned about the need to use stochastic modelling tools in context for retirement planning.

He said: “Stochastic modelling tools are wonderful things if you understand them and know all the caveats to go with them but you could end up with a quant-based solution that is justified by a set of maths but not necessarily the right solution for the client. I would advocate the development of quant-based tools but only with an outward-looking client-based analysis and proper understanding of the client’s needs.”

The Hartford’s director of pension products Mark Stopard said: “When you start looking at third-way products, you need to understand the trade-offs there, what you are giving away on the upside and what you are chopping off on the downside. You are going to describe that in words to the client but the adviser needs to understand those numbers. Our experience is some advisers get it intuitively, others want to see numbers. In terms of numbers for comparison, there is not a lot of point in us doing it ourselves, it needs to be independent.”

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It should be made clear that at no stage have I accused Adam Samuel of showing any sympathy for the Pickerings and their legal battles against the Financial Ombudsman Service.

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