Keeping retirement planning centralised and bespoke

3 min read 1 Mar 21

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As we’ve reported, our latest report on Centralised Retirement Propositions, in partnership with consultants NextWealth, reveals around 50% of advisory firms in the UK now have a centrally agreed approach to planning in retirement.

This ranges from a centralised approach to cashflow modelling and calculating client withdrawals, to tools for determining tolerance and attitude to risk in retirement.

Keeping advice individual

But not all firms are sold on the idea of using the same framework for every retirement client. This is especially evident among smaller firms.

Forty percent of sole traders say they have no plans to introduce a CRP, compared to 27% of firms with two to five advisers and 34% of firms with five or more advisers.

This might seem obvious (what do you need to centralise when there’s only one of you?). But the principal reason seems to be the perceived contradiction between having the same process or framework for all clients and the desire to offer bespoke, individualised advice.

As one firm said during the research: “a centralised proposition would actually fall outside of my remit. For me, it’s bespoke research every time and to come up with the answer every time.”

Staying consistent

But other firms are finding systematic solutions that allow for a robust, consistent process that’s also highly tailored to each client. One paraplanning firm advises its client firms to work to a matrix of options so that the process is repeatable but almost every client will come out with a different plan, because of their unique position and needs.

With the FCA wanting evidence that every client is being treated the same, consistency – not cookie-cutting – seems to be the key here.

Supporting client acquisition

Advisers deliberating whether or not to implement a CRP may be very interested in one other finding in the report: firms that have a CRP in place are more likely to have reported gaining more clients than usual over the past year (13%) than those without a CRP (4%).

As many retirees and pre-retirees reassess their plans in the wake of the pandemic, being able to demonstrate a robust framework to help them optimise their financial position in the years ahead could be a very powerful client acquisition tool for any firm. Whatever its size.

Read more

Why firms are choosing a centralised retirement proposition

How are advisers investing for retirees?

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