Royal London responds to advisers' call with launch of new Drawdown Governance Service
The new service is now available to help simplify the drawdown review process
2nd June 2016
As a market leading provider in the income drawdown market, with over 51,000 Income Release policies in place as at the end of December 2015, Royal London is regularly in touch with advisers in this market. Royal London’s new online Drawdown Governance Service has been designed to help advisers easily assess the sustainability of their clients’ income, on a regular basis. The service, which supports the delivery of drawdown planning, is the first of its kind and has been developed in conjunction with industry experts Moody’s Analytics, and advisers who operate in this market.
The new Drawdown Governance Service, designed for advisers with clients in Royal London’s Income Release drawdown plan, provides:
- An income sustainability score for each client, calculated using information provided by the adviser.
- Proactive tracking of progress against this score using colour coding to instantly recognise those clients potentially at risk of not meeting their objectives.
- Information to assess the sustainability of the set target income against agreed objectives over the short and the long term.
- Easy to read, automated, client reports to help advisers at client reviews, that may be edited and personalised by the adviser.
- An audit trail of client reviews carried out to help advisers meet their compliance requirements
- Links to other Royal London support services, such as the Income Planning Tool and At Retirement Tool.
Impartial research with advisers by NMG Consulting found that the drawdown process had become far more onerous for advisers and workloads had increased. One adviser said that the time taken had doubled in the last 12 months.
Lorna Blyth, Pensions Investment Strategy Manager at Royal London, commented:
“For those who choose to use drawdown to provide their income, it is so important that they understand all the risks that could result in their income not lasting into their ‘old age’. Sequencing risk is just one of those risks, but one that many people new to drawdown will not have encountered before. The new Drawdown Governance Service from Royal London helps advisers to simply and easily assess this risk and others, on a regular basis, so their clients have peace of mind that there are not likely to be any nasty surprises. As well as reducing the administration headache for advisers of manually reviewing an ever growing number of clients who are using drawdown , the new service helps to free up resource so more cost-effective and as a result more profitably.
“The Drawdown Governance Service simplifies and yet improves the review process, enabling advisers to focus more of their time on the delivery of financial advice to their income drawdown clients.”
Additional research conducted by CWC Research and the lang cat in their report, Never Mind the Quality, Feel the Width 2, highlighted that many advisers have not changed their fee model to take account of the number of regular reviews that drawdown clients will require. Regulatory guidance states that people in drawdown need to regularly check on how the level of income they are taking is affecting the value of their fund. This requirement, with typical portfolios as low as £100,000, means that adviser charging on pre-pension freedoms basis is unlikely to be profitable or sustainable going forward.
Ron Hoare of Fairstone Financial Management, who reviewed the service as part of the NMG research project, said:
“I can see the Royal London Drawdown Guidance Service being very popular - it is a simple but powerful service that could save advisers time and money as the information is available so quickly and easily. In my opinion, the service offers reassurance for advisers concerned about future liabilities by showing that they are proactively managing their clients’ needs.”
Advisers looking for more details on the new Royal London Drawdown Governance Service should speak to their normal Royal London contact or go to http://adviser.royallondon.com/drawdowngovernance.
For further information please contact:
Corporate PR Manager 0207 506 6740
firstname.lastname@example.org 07919 170127
Notes to editors
- Royal London was one of the first providers to offer a flexible drawdown plan and the Royal London’s income drawdown product - Income Release, available since December 2007. As at year end 2015, Royal London had over 51,000 live Income Release policies. More details on Royal London’s income drawdown plan are available from financial advisers or online at http://adviser.royallondon.com/incomerelease
- The impartial qualitative review of the Royal London Drawdown Governance Service across a range of advisers through focus groups, face to face in depth interviews and focused user testing was conducted by NMG Consulting in December 2015.
- Details of the CWC Research and lang cat Report on Never Mind The Quality, Feel the Width 2, is available from http://langcatfinancial.co.uk/
- Details of the AKG analysis which was also carried out for Royal London is available on request.
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £87.9 billion. Group businesses provide around 9.1 million policies and employ 3,051 people. (Figures quoted are as at 31 March 2016).