3 min read 5 May 20
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Advisers are rejecting the view that having a Centralised Retirement Proposition (CRP) is a restrictive 'sausage factory' approach to retirement planning, with almost three-quarters planning to have one in place by 2021.
Research carried out by NextWealth for M&G Wealth questioned 200 advisers on their use of CRPs. While just under half (48%) of advisers currently have a CRP in place this is expected to rise to 71% in the coming year.
For the purpose of the research a CRP is defined as a centrally agreed approach to retirement planning that typically includes investment and withdrawal strategy. It may also extend to fact finding and assessing capacity for risk.
Advisers are increasingly of the view that CRPs offer a framework than can be used to deliver advice. This flies in the face of the view that CRPs are restrictive and don’t offer the capacity to offer advice tailored to the specific client– a view still shared by 89% of advisers who don’t want to offer a CRP.
The most commonly cited reasons for establishing a CRP are:
Commenting on the research findings, Jo Kite, head of proposition and marketing said:
“The research found that clients seeking retirement advice make up 60% of advised clients and with demand set to grow even further then CRPs can play an important role in helping firms deliver retirement advice more efficiently and consistently. Most importantly, advisers told us it can deliver real client benefit and if we think of a CRP as a framework rather than an inflexible ‘sausage factory’ approach, it’s hard to see any reason not to adopt. This could be particularly the case as advisers help clients plan for a sustainable retirement income against a background of the volatility experienced from COVID-19.”
Commenting on the research findings, Heather Hopkins, managing director of NextWealth, said:
“Our research with M&G Wealth confirms that a CRP does not equate to an overly restrictive approach to financial planning. Instead, a CRP is a framework in which firms offer retirement advice. Firms that have adopted a CRP see it directly benefiting clients and driving efficiency in the firm. As more firms see the benefits of a CRP, I have no doubt we will see greater adoption across the profession.”
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