“Smart advisory firms will augment their business models to include simplified advice services to widen their appeal to this wider more informed demographic. These services will be technology-based and created by platforms. If advisers do not evolve their services, this part of the market will be captured by the new breed of D2C [direct-to-consumer] execution-only platforms that are soon to hit the market.”
Mr Trott points out that larger pension pots will most likely find a natural home within low-cost platform-based Sipps, which could lead to increased price pressure and at the same time result in increased demand for more user-friendly technology.
“Taking new money to one side, the pension drawdown market has traditionally been dominated by life offices. With the advent of the new rules and pricing pressure, many advisers will review their existing clients to consider the potentially better outcomes available through new technology. With the right positioning, platforms stand to benefit massively from this transfer opportunity.
“Platforms and pension income are all about investment. There are enormous opportunities for discretionary fund managers to innovate in the way they generate income for clients and build simple, transparent investment solutions that manage the risks associated with generating an income.”
Nyree Stewart is features editor at Investment Adviser
Platforms and pensions: key figures
3/5 – Proportion of advisers who think only half or fewer of their clients will be able to fully take advantage of the new Isa allowance of £15,000
49% – Percentage of advisers that expect Sipp pricing structures on platforms to reduce
67% – Percentage of unwrapped assets sold through platforms
98% – Percentage of new stocks and shares Isa business written on platforms
Source: Platforum
Expert view – pensions and investments
What do the pension changes mean for the investment world, advisers and platforms?
Jasper Berens, head of UK funds, JPMorgan Asset Management:
“Advisers will have to raise their expertise to meet a newly opened market, requiring them to gather significant context across capital markets, investment strategies, and financial planning, not to mention no single client will have the same set of circumstances. To be equipped, financial advisers have to think about client needs at all stages of the retirement journey.”
Ben Willis, investment manager and head of research, Whitechurch Securities:
“[Pension changes] will have a big impact, positively for the platforms. Retirees have greater control of their pension investments – whether this entails taking the whole pot, phased withdrawals or moving into income drawdown. The flexibility means that monies will have to be managed and the simplest way for advisers to do this is by putting clients’ monies onto platforms. Discretionary fund managers may also benefit as they will be able to manage monies on their clients’ behalf, thus removing this burden from advisers.”
