Where are all the centralised retirement propositions?

In the News  |     |   Money Marketing

Danby Bloch


It is time there was a grown-up conversation about investing to generate post-retirement income. The pension freedoms have utterly changed the retirement planning scene and many advisers have simply not yet caught up with the implications and changed their practices accordingly. One of the more startling facts to come out of last week’s Platforum 2017 conference was the revelation that some 60 per cent of advisers do not have a centralised retirement proposition, that is, an agreed approach to investing in retirement.

Just over half the firms with at least £100m in assets under advice do have a centralised retirement proposition but, frankly, you might have thought the proportion would be nearer 100 per cent.

Far more firms have developed more general centralised investment propositions but these tend to lack the special focus needed on the planning requirements of people using their pensions and other assets for income.

The emphasis here is on clients who need to generate regular amounts from both dividends or interest, as well as by digging into capital on a regular basis.

There are some lucky clients who do not need to draw on their pension to provide them with an income after they stop work. In their case, the freedoms have transmuted such funds from a tax-efficient retirement plan into an inheritance tax mitigation arrangement of almost unparalleled attractions. Their pensions are free of IHT when they are passed down the generations but are nevertheless available to draw on if they ever need cash.

The pension scheme for such clients is the ultimate reservation of benefit – something the IHT legislation strives mightily to ban for almost every other category of asset, with the exception of qualifying business assets which are mostly riskier and often much less liquid.

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