The industry has failed to innovate around pension freedoms, meaning advisers do not currently have the tools that would allow them to structure retirement plans in the most engaging and efficient way, says Verona Kenny.
The managing director of intermediary at 7IM says it is "critical" the industry understands how it can design the best products for retirement income, especially as regulation is changing.
She says the industry, and platforms in particular, are "brilliant" in helping clients accumulate wealth for their retirement. But when clients tip over into decumulation, "we really need to do better to ensure clients don’t fall into the pitfalls created by pension freedoms".
In a Q&A with FTAdviser In Focus, she explains what needs to happen in retirement income to help advisers and their clients adapt to a changing economic and regulatory environment.
FTA: What is the provider’s role in the process of creating an advised client’s retirement plan?
VK: As an industry we will only be successful if we work together to deliver the best possible outcomes for clients.
Advisers should be demanding providers deliver innovative and flexible products, services and solutions. We all need to work together to solve the retirement puzzle.
So as a provider, we will only be able to deliver the most innovative and relevant products by working closely with advisers and capitalising on the opportunities for the entire industry.
FTA: Is the way you are working with advisers changing?
VK: Demanding choice and flexibility is one thing but we know that too much choice can be overwhelming.
It’s key that the industry provides all the pieces of the retirement puzzle to enable financial advisers to do what they do best and put those puzzle pieces together in the most appropriate way for each client in an engaging and efficient way.
The need for the industry to develop the best possible retirement products has been reinforced by regulatory changes in recent years.
It is critical that we understand how retirees’ needs are changing and how we can design the best products so retirees can achieve the goals they set out.
Ultimately, customers are looking for reassurance that they will fulfil all the dreams they desire and have worked so hard for along their journey. The industry needs to get it together to deliver the outcome clients deserve.
FTA: How might the consumer duty foster closer collaboration?
VK: We welcome the consumer duty because it ultimately helps the client to understand the best products and services, and it holds the industry to account on its actions.
Because of the need for transparency to ultimately deliver fair value for the customer, cross-communication within the industry has never been more relevant and important, so we all need to work together on delivering just that.
FTA: Do you feel providers have done enough when it comes to product innovation since the pension freedoms?
