View more on these topics

Royal London launches drawdown warning system for advisers


Royal London is launching an “early warning” system for advisers with clients in its drawdown product.

The mutual saw a 67 per cent increase in sales over 2015 but cautions new drawdown customers face “financial detriment” if they are unaware of issues such as inflation and investment risk.

The new service will alert advisers if clients make unexpected withdrawals, for example.

Non-advised customers will not have access to the warning system, however the provider says it does not technically offer this group drawdown.

Customers can make ad-hoc withdrawals from pots but this is not written under drawdown contracts.

The move follows Professor David Blake’s Labour-commissioned report into the pension freedoms which recommended tighter controls on drawdown products.

Royal London says advisers will be able to summarise all their clients at risk of not meeting income targets, compare different drawdown products, assess sustainability and produce client reports.

Pension specialist Fiona Tait says: “There are encouraging signs that people are acting sensibly following the introduction of the pension freedoms – but it is early days.

“For those customers that choose to use drawdown as their income producing vehicle it is particularly important that they understand that their income needs to last into their old age.

“Drawdown investments are subject to specific risks, such as sequencing risk as well as the effect of  inflation or market events. The new service will help to flag these issues, so an adviser doesn’t discover too late that a client’s underlying fund is no longer able to support their income objectives.”



Govt scraps 45% tax on dependants drawdown

A rule that forced dependants to take inherited pension funds as a lump sum at 23 has been scrapped by the Government. The Budget documents reveal technical changes that mean dependants’ flexi-access drawdown accounts get converted into nominees’ accounts. As a result they will no longer have to take any remaining funds as a lump […]

Financial advice-planning-advice-cashflow-analysis

FAMR urges Govt to redraw workplace advice

Strict tax rules around providing access to advice through employers needs to be redrawn, the FCA says. As reported earlier by Money Marketing, as part of the final report of the Financial Advice Market Review, the regulator recommends the Government should ater the current £150 tax exemption to “provide employers with an easy way to […]


Drawdown pushes LV= pensions business into profit

LV=’s life and pensions business has turned from a £7m operating loss in 2014 to a £41m profit in 2015. According to the mutual’s full year results, published today, the life and pensions division went into operating profit driven by a 26 per cent rise in pension sales, which includes drawdown, from £636m to £801m […]

Martin Foden discusses how convenience is affecting the construction of fixed income portfolios

In this short video, Martin Foden, head of credit research at Royal London Asset Management, discusses how convenience is affecting the construction of fixed income portfolios. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm