Income withdrawal strategy has been the top focus area for advisers after the Financial Conduct Authority released its retirement income review.
The research by Standard Life, part of the Phoenix Group, found that suitability, cash flow modelling and period reviews were also key takeaways from the review.
The survey, comprising 200 advisers, found 26 per cent expect the review to lead to better outcomes for their clients.
However, 44 per cent did not think the review would make any difference to client outcomes.
Chris Hudson, retail advised managing director at Standard Life, said: “The retirement advice market has been a huge growth area in recent years, and rightly so, as the challenges facing clients around how best to access and manage their pension savings in their journey to and through retirement, to ensure they don’t outlive them, are significant.
“Moving from a regular salary to managing a pot of money that needs to last the rest of your life, however long that might be, is a daunting prospect and advice is crucial.
"These findings chime with the tone of the FCA’s review. Advisers see areas where processes can be improved and outcomes strengthened.”
The research also showed advisers were split when asked about the level of innovation and choice among providers.
Some 28 per cent of advisers said there was not enough choice or innovation in the market.
While 62 per cent thought that providers were already meeting changing adviser and customer behaviour after the 2015 pension reforms.
Hudson added: “The advice market has changed dramatically in the last ten years both as a result of the pension freedoms but also in response to improvements in technology and regulatory reform.
“We don’t expect any let up in the pace of change and there’s plenty of scope for innovation in retirement income solutions. We know that nine in 10 people are looking for income security in retirement, but also want to hold on to an element of financial freedom and be able to access their pension savings flexibly.
“The FCA echoed this in the review when it talked about the need to identify a client's minimum income needs and essential expenditure.
"The good news is that we are starting to move towards a 'best of both' strategy to combine the certainty and security offered through an annuity, with the flexibility and growth potential of remaining invested in drawdown.
“Other retirement income solutions such as smoothed managed funds can also help reduce the uncertainty of investing by providing some shelter from the daily ups and downs of the stock market.
"Advisers will be looking to address most client’s twin goals of income certainty and flexibility in retirement and advancements in retirement income solutions, and how they are used in combination, is key.”
alina.khan@ft.com
