It
seems likely the retirement advice market will evolve into a two stage process.
Retirees
will first need to learn about their options and the implications of those
options. This will be the ‘guaranteed guidance’ much heralded by the
Government. There are hundreds of thousands of people retiring each year and
the Government wants each to have a face to face meeting so it is unclear how
this will be delivered. But it will be free and impartial so prospective
retirees should first take advantage of this offer when it is available. This
should allow retirees to understand and perhaps come to a conclusion on the
best option for them.
If
their chosen option is more than hiking all the money out of their pension as
soon as they can they may well need further advice on how to set up the
Drawdown or which annuity to buy, what investments to hold and other such
matters. This more specific advice is likely to be still carried by the
qualified IFA community at a cost to the retiree. There is a danger that the
first phase will encourage some to go it alone and no doubt some will make
expensive mistakes.
It
will be interesting to see how the FCA reconciles their current view of
drawdown as a ‘high risk product’ with any new advice process.
Simon
Nicol
Pension
Director
Telephone:
+44 (0)20 7893
3456
Email:
contactus[@]broadstoneltd.co.uk
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