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Zurich eyes non-advised drawdown for 200k customers


Zurich plans to launch a non-advised drawdown product for corporate pension customers and is also considering expanding the service to its retail clients.

The insurer aims to have a proposition ready by the third quarter of this year for its corporate customers. Whether 200,000 retail customers aged over 55 will be able to enter drawdown contracts without an adviser is “under review”, according to head of corporate life and pensions UK Simon Foster.

He says: “We are working on the ability to have drawdown as part of our corporate scheme arrangements. At the moment if you want draw down through Zurich you need to go to an adviser and take out flexible drawdown on our retail platform, but we wanted that available to our corporate clients on a non-advised basis.

“We recommend that people do take advice or guidance if they want to use drawdown, but we are reviewing whether we make it available.

“We are supportive of advice but we don’t want advice to be a barrier.”

Restrictions on minimum pot sizes or range of investments have not yet been finalised.

In February Money Marketing revealed that Scottish Widows was to allow non-advised drawdown to customers with at least £10,000 of pension savings.

Customers are placed into ‘semi default’ funds based on how long they want their money to remain invested.

How-ever, Legal and General has shied away from offering drawdown direct to clients. The firm says drawdown is “not a straightforward product” for customers who do not take advice.

Money Minder Financial Services managing director Ray Black says: “I don’t mind the idea of a non-advised drawdown product at all. I see a place for it, particularly with funds less than £50,000 or the high-end clients that can make their own investment decisions.”

Last November the FCA signalled it would be investigating non-advised drawdown sales as part of a broader review of its handbook rules due in this summer.

In addition, the regulator said it would revisit guidelines on how drawdown investments are communicated to consumers.

It says current projection rules detailing how funds could grow risk producing “confusing or irrelevant information”.



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Richard Anderson 2nd July 2015 at 11:04 am

    Why would a client with £200k not want the security of advice, and the protection of FOS / FSCS etc (and dare I say whole of market advice) ?? This smacks of Zurich simply looking to cash in on what it may see as a lucrative market.

    They could probably make a business case for selling knives, drugs and dynamite as well, but would of course issue a warning statement like ‘we recognise that these are dangerous products, and therefore of course recommend that appropriate handling/health & safety advice is taken’ (but we are prepared to sell them because it is a business opportunity, and hey, if we don’t sell them, customers will just buy them from somewhere else).

  2. Philip Hodges 2nd July 2015 at 1:44 pm

    I think a bit of confused reporting – a figure of 200k mentioned as number of retail customers. Likely average pot sizes could be < £40k.

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