- Advisers value effective execution more than investments or enhanced technical features.
- Increasing Drawdown demand drives tension between short-term income solutions and long-term sustainability.
- Demand grows for technology to facilitate changing client needs, and integration is the key to optimum efficiency.
A new adviser research study by the lang cat on behalf of Aviva, reveals the key priorities facing advisers today as they balance the changing demands of clients in a shifting retirement landscape five years on from the introduction of pension freedoms.
The lang cat conducted in-depth conversations with adviser firms across the UK, exploring the market trends and pressures that they are currently facing. Central to discussions was whether firms’ retirement proposition for investment is different from their pre-retirement proposition.
What emerged was a picture of key priorities for the foreseeable future; what advisers are looking for from technology providers, and in particular, platforms; what are the most important conversations they have with their clients; and how they see demands on their own advice and expertise changing in the coming years.
Five key themes emerged, which resonated across all conversations:
- Client relationships: Whilst technology and investment philosophy are important enablers, at the heart of everything lies the relationship between advisers and their clients
- Client segmentation: There are a variety of investment philosophies being used, since clients each have individual aims and needs. Advisers are seeking to create segments that unite customers by more than just the value of their investable assets
- Getting the basics right: Pay clients when they expect it, and make it as simple as possible
- Flexible technology: Increasing divergence in client needs means technology must be flexible
- Integrated technology: In a sector where Adviser firms are typically running five different standalone systems – necessitating repeated re-keying of data - the ability to integrate is vital.
The retirement market has seen huge changes in recent years, both in the sheer number of external factors – the decline of DB pensions, auto enrolment driving more saving but arguably not at a high enough level, state pensions moving further into the future for most people and set to continue this trajectory, increasing longevity - and consequently in the impact we have seen on the decline in annuities and the rapid rise of drawdown.
Alistair McQueen, Head of Savings and Retirement at Aviva, comments:
“This research gives us a great insight into the main concerns facing advisers in navigating their clients through post-retirement, and poses several important questions for us to consider.
“Chief amongst these is how we can continue to use and improve technology to underpin the central relationship between an adviser and their client. This is both in terms of the service the client ultimately receives and in creating efficiencies, whether through integration or administration, which will allow more productive conversations.
“It’s also clear that future client needs will demand more, rather than less, flexibility as their circumstances change, and this speaks directly to what will be expected of providers in supporting these discussions.”
Steve Nelson, Consulting Director, the lang cat, said:
"The main theme that ran through each of our adviser conversations was that the client relationship trumps all and that technology should be used to enable this relationship as easily as possible. This is absolutely nothing new in our many interactions with the adviser community, but it’s great to see it reaffirmed once again.
“However, currently, an army of advisers, paraplanners and admin staff across the UK carry most of the burden of making systems work on behalf of their clients. We remain disappointed but not surprised at the amount of sheer effort it takes to properly integrate the different systems they use in the process of giving advice, building portfolios, creating good disclosure documents and managing clients. This doesn’t feel right in 2020.
“Advisers need to shout loudly about what they need from providers, and providers in turn need to understand that it’s in their interests to make life as easy as possible for them. There is no good alternative to getting this right.”
- ENDS -
Aviva - Catherine Comben
+44 (0) 7800 692087
lang cat - Steve Nelson
+44 (0) 7545 206280
Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
- We exist to be with people when it really matters, throughout their lives. We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2020, we paid £30.6 billion in claims and benefits to our customers.
- Aviva is invested in our people, our customers, our communities and our planet. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Aviva has been leading this agenda for decades: Aviva was the first international insurer to go operationally carbon neutral in 2006 and we are champions of renewable energy and energy storage at our offices, allowing us to achieve our 2030 carbon reduction target (70% reduction on 2010 levels) 10 years early. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
- Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
- We are focused on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience. We also have strategic investments in Singapore, China and India.
- At 30 June 2021, total Group assets under management at Aviva Group are £522 billion and our Solvency II shareholder capital surplus is £12 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
- The Aviva newsroom at www.aviva.com/newsroom includes links to our spokespeople images, podcasts, research reports and our news release archive. Sign up to get the latest news from Aviva by email.
- You can follow us on:
- Twitter: www.twitter.com/avivaplc/
- LinkedIn: www.linkedin.com/company/aviva-plc
- Instagram: www.instagram.com/avivaplc
- For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva