“The retirement income market is a key area of our focus, particularly the suitability of both products and advice as the industry adapts to pension freedoms. From a wider perspective, the prospect that consumers may not get a retirement income that meets their needs or expectations.” The FCA - Sector Views 2020
‘Drawdown Review’ is the latest box set to be added to Money Alive’s client video engagement platform. The platform is licensed by advisers and, since launch in 2018, has been used by them to educate their clients with over 100,000 of Money Alive’s highly acclaimed videos. The box sets are interactive and each video produces a record of the client’s engagement and understanding for the adviser giving the platform powerful compliance and risk management benefits.
Money Alive began working on the Drawdown Review box set in 2019 following correspondence with the regulator, and meetings with product providers and advisers, which unanimously suggested income in retirement was going to become a greater area of regulatory scrutiny. This has been borne out by the arrival of the infamous “Dear CEO” letters which arrived on advisers desks last month and yesterday’s ‘Sector Views’. In a nutshell there is concern about the number of clients who have elected to take their income in retirement via drawdown including a suspicion of ‘adviser bias’ in the outcome (as advisers receive an income stream from the Drawdown options versus a one off payment from annuity).
Money Alive established its reputation helping advisers provide clients with generic, impartial and unbiased education regarding final salary transfers (recognised by the PFS in its Gold Standard Transfer Process). With ‘Drawdown Review’ advisers now have the opportunity to take a similar approach with their drawdown review process - directly addressing these latest regulatory concerns and helping address any concerns of adviser bias.
Box set chapters
- Reviewing your drawdown pension - 2m
The importance of reviewing your drawdown pension and the important factors to consider. This chapter features pension expert Mark Thewlis.
- Do I need to change anything? - 4m 55s
Key factors to consider including your objectives, income & capital, risk, taxation, inflation and fund performance.
- Are the risks still right for me? - 5m 25s
Are you still comfortable with the risks you are taking and what alternatives do you have?
- Tax - 4m
How is any income or lump you take from your drawdown pension taxed?
- What will happen when I die? - 2m 42s
The death benefits available from your drawdown pension, the options available to your beneficiaries, and the importance of keeping your wishes up to date.
- What is the risk of me running out of money? 5m 14s
Understand the different risks you need to consider and the impact they could have. This chapter is a key concern of the FCA.
NEW FEATURE - Optional videos
In a new platform feature the viewer then has the option to watch videos on reaching age 75 (covering the second lifetime allowance test) and making withdrawals if the viewer is in serious financial difficulties (covering debt and means-tested benefits).
Even where a client watches all the chapters the viewing still takes less than half an hour in total and it is packed with useful reminders and information to stimulate the viewers’ thinking and cement their understanding.
Commenting on the development Money Alive’s CEO Andy Kirby said:
“Our new Drawdown Review box set enables advisers to give extra value to their clients by offering them an enjoyable, efficient and different way of engaging with their drawdown pension. It sets them up perfectly to engage in and think about their drawdown pension and its suitability, and get them ready for their review meeting with their adviser, leading to more productive meetings and a more efficient and, arguably, a fairer review process”.
What’s the impact of using Money Alive?
The Product Team have undertaken a survey of viewers in the last few months and the results, based on over 1,400 responses are clear:
- 98.1% of viewers valued their adviser giving them access to Money Alive
- 94.3% of viewers agreed they were better informed ahead of their advice meeting
- 9.3⁄10 is the average score viewers give to the quality of Money Alive’s information