Panacea Adviser survey: 89% of advisers say Robo-Advice is a threat to the industry

Almost nine out of ten financial advisers warn that automated services pose a threat to traditional face-to-face financial advice, research by Panacea Adviser has revealed.

In a survey asking 118 financial advisers whether robo-advice presented a threat or opportunity for face-to-face advice, only 11 per cent described it as a positive for their industry while the vast majority raised concerns that robo-advice could prove damaging to traditional financial advice.

Commenting on the results of the research, Panacea Adviser Chief Executive Derek Bradley, said: “With the amount of attention and industry debate sparked by robo-advice, it is perhaps not so surprising to see such a strong reaction from advisers towards the ‘rise of the robos’. The current mood appears more unusual, however, when you consider that automated services still represent a relatively small market here in the UK while the technology itself is also fairly limited at this stage.

“The US market also offers a glimpse of what looks like a more positive outlook for advisers when it comes to robo-advice. The ability to combine elements of both human and automated advice is actually seeing many traditional advice firms in the US prove more popular than robo-advice models that rely solely on technology.”

ADVISER VIEWS ON ROBO-ADVICE

The research also gathered adviser opinion on both sides of the debate, highlighting some of the key challenges – and benefits – that automated models can bring for advice firms.

Pete Matthew, Managing Director for Jacksons Wealth Management, believes marketing could prove the biggest hurdle for firms looking to adopt robo-advice. He said: “An online service can provide a way of perhaps serving ‘lower value’ clients in the short-term so that they engage with the adviser’s brand, which may well lead to higher-ticket business in the future.

“But while the technology behind robo-advice actually appears to be straightforward enough, the real issue is that most advisers are clueless when it comes to marketing. The world of marketing has changed immeasurably. Now, it is all about providing value to the prospect by educating, entertaining and inspiring clients to take action. The social aspect should not be underestimated either. Increasingly people buy based on the recommendations of social media circles and unless advisers are influencing within these channels, no-one will show up to their fancy robo-advice websites.”

 Alan Hughes, Partner at Foot Anstey LLP, also calls for the FCA to clarify what constitutes ‘advice’ and ‘guidance’ in relation to automated-models. He said: “As robo-advice develops, advisers need to consider carefully how it impacts on the market, what that means for their own business and clients and how they can use this as an opportunity. Robo-advice will never completely replace face-to-face advice but it is a case of “ignore at your peril”.

“Going forward, any further clarity that can be provided on the difference between advice and guidance will be very useful in bringing automated models to market. The FCA should explicitly address these issues and be proactive, rather than just tweaking the regulatory framework and then telling firms that they need to go off and reach their own view.”

Focusing on the regulation of automated services, Derek Bradley added: “A vital UK consideration that would assist in the adoption of robo-advice models is that the FCA approves the technology and their complicated algorithms. Some time taken now could mean that the constant retro aspect of regulation against products or advice is removed and public confidence in a ‘fit to fly’ model will see a greater, quicker embrace by advisers and of course the public.”

 

www.panaceaadviser.com 

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What is the point of fines on corporate bodies

What is the point of fines on corporate bodies

Some time for some focus and an application of common sense and fair play?

“Second World War veteran Major James Fyfe, who signed up aged 17 and fought at Dunkirk, fell of a trolley at Royal Berkshire Hospital and broke his neck in March 2011”.

The ‘learnings’ or ‘outcomes’ (yes those regu-words again that are always used when things corporate or governmental go wrong) in this very tragic state of 2011 affairs is that Graham Sims, the boss of Royal Berkshire Hospital NHS Foundation Trust admitted a charge of “breach of an employer of general duty, other than to an employee, relating to the failure to properly secure the hospital bed.”

This is yet another example of a fine meaning nothing at all. Just like banking fines. As Billy Bennett’s song goes It’s the rich what gets the pleasure”!

What is the point of fines on corporate bodies? They mean nothing at all. And even worse, the victims of their blunders see it means nothing.

James Ageros, the NHS trust’s QC said: ‘at the heart of this there is a human tragedy and the Trust apologises and sends its condolences where there was the death of their father in unfit circumstances”.

In this case the trolley that was ‘blamed’ for the sorry mess was “corroded in places and key mechanisms, including a spring inside the side bars, were missing”.

Nobody is held responsible on a meaningful personal level anymore for the errors that cause death, distress, or in the case of banks, financial loss. So that’s all right then?

A £200k fine? Extraordinarily time to pay was asked for by a man whose salary is most likely heading toward £300k- over 4 years was granted. Let’s move on, get over yourselves?

But somebody was responsible for this terrible outcome, ultimately it was the ‘Trust’ but the real blame lies much further down the chain of command. This equipment was in use all day, every day. Was it maintenance, very possibly? Was it the hospital staff that put him on the trolley, surely they must have noticed that the sidebars would not lock?

What is for sure is that it must be someone.

If this were a small business, let’s just say a small IFA business, rather than a corporate body a very different ‘outcome’ would have been seen. Somebody would be rightly identified as individually responsible, substantial compensation, not a fine, paid to the victim or their family by way of the business owners, possibly by their public liability or business insurance and without doubt the business owner would have been prosecuted, maybe even jailed and the business even closed down.

Why is it that corporate responsibility seems to override individual responsibility? Fines should go toward redress for the victims of failure and under no circumstances should HM Treasury treat them as a windfall tax as is currently the case with banking fines.

Perhaps there has come a time that workers in large corporate bodies, banks for example, are equally financially liable in cases like this.

 

Just a thought?

Paralysed by Gunfire, but Denied Care

Having recently returned from a holiday in the US, I thought that IFAs would be interested in reading about this very sad case written, reported on by reported on by RONI CARYN RABIN on JULY 20, 2015 10:31 AM

“There is no video of the altercation between Monroe Bird III, a 21-year-old sitting in a car with a friend, and Ricky Leroy Stone, 56, a security guard who found them one night in the parking lot of an apartment complex in Tulsa, Okla.

But the tragic culmination of their encounter is not disputed: Mr. Stone drew his gun and shot Mr. Bird, leaving him paralyzed from the neck down.

Three months later, as he lay in the hospital hooked to a ventilator, Mr. Bird’s insurance company declined to cover his medical bills. The reason? His injuries resulted from “illegal activity.”

Yet Mr. Bird was not convicted of any crime in connection with the incident. He was not even charged.

Without insurance, Mr. Bird’s family could not move him to a rehabilitation center specializing in spinal cord injuries. He was discharged from the hospital and died at home last month from a preventable complication often seen in paralyzed patients.

The incident joins a disturbing litany of cases in which black men have been shot by white men in law-enforcement capacities. Mr. Bird’s family and their supporters believe racial bias motivated the shooting, at least in part, and protected the guard from criminal prosecution.

But Mr. Bird’s story comes with a particularly bitter sequel relevant to Americans of any background: The plan’s refusal to pay has left his family owing as much as $1 million in medical bills and, experts say, shines a light on a little-known loophole buried in the fine print of many health plans.

There are no firm numbers on how often insurers deny medical coverage based on allegations of illegal activity. But cases like Mr. Bird’s “are more common than people think,” said Crystal Patterson, an attorney in Minneapolis and chairwoman of the American Bar Association’s committee on fiduciary litigation.

Insurers have long relied on allegations of illegal activity to deny coverage to patients injured in a variety of contexts, from traffic infractions to gun accidents. The judicial rationale is that “we don’t want to reward illegal activity,” she said.

In one court case, a union health plan denied the claims of a worker’s son who was injured while allegedly building a pipe bomb, Ms. Patterson noted. In another, an insurer declined to cover the medical expenses of a man who lost control of an uninsured, unregistered car while trying to pass another driver in a no-passing zone.

Courts have upheld the denials even when there were no convictions for illegal activity. The administrator of the policy can deny claims even when no criminal charges are filed, Ms. Patterson said.

“The administrator gets a lot of latitude to make that decision,” Ms. Patterson said. “It’s a much lower burden than ‘beyond a reasonable doubt.’”

Lisa Stites, a spokeswoman for Craig Hospital, a rehabilitation facility for patients with spinal cord and traumatic brain injuries in Denver, said in an email that it was common for health policies to contain so-called exclusions for injuries resulting from drug or alcohol use, felonies, self-inflicted trauma or “hazardous” behavior.

Dr. Ford Vox, a specialist who works at the Shepherd Center, a rehabilitation facility in Atlanta, said the exclusions provided insurance companies with “an excuse to get out of very expensive cases.”

“The insurance can pull the rug out at any time,” said Dr. Vox, who also writes about medical topics for various publications. “And it’s all top secret — people don’t know about it until something happens to them.”

Insurance exclusions for illegal activity have been outlawed in some states, but state laws do not apply to health plans administered under the federal Employee Retirement Income Security Act, which sets standards for most pension and health plans in private industry.

Even after passage of the Affordable Care Act, self-insured plans regulated under Erisa maintain wide latitude to determine coverage. These plans “can do pretty much what they want to do,” said Robert Laszewski, an insurance industry consultant in Washington.

Mr. Bird’s family was insured by his stepfather’s employer, Southern Hills Country Club, and claims were processed by HealthCare Solutions Group of Muskogee, Okla. Citing privacy laws, representatives of both companies declined to comment on Mr. Bird’s case.

The events leading to Mr. Bird’s shooting may never be fully known. Like many trauma patients, Mr. Bird had no memory of the incident.

According to the police report, Mr. Bird was sitting in his car with a girl in the parking lot of the apartment complex where he lived with his sister’s family around 8:30 p.m. on Feb. 4.

Mr. Stone, the security guard, told police he approached the car because he had been instructed to look out for couples having sex in the parking lot. Mr. Stone said he shone a light into the car, told Mr. Bird that he was with security, asked for identification, and then tried to open the car doors.

Mr. Bird locked the car doors and tried to back out of the spot, according to Mr. Stone, who told police he stood behind the car to prevent Mr. Bird from leaving and was hit when the car backed up. He said that he jumped and fell against the rear window, breaking it.

When he was back on his feet, he said, he fired three shots as Mr. Bird drove away. He told police that he feared for his life.

But the car passenger, a minor whose name has not been released, told police she did not think the car struck the guard, and said the guard only started firing as they drove away.

Mr. Bird was paralyzed immediately and was treated in Tulsa hospitals for several months. In April, an official with HealthCare Solutions Group called Mr. Bird’s stepfather, Johnny Magness, to say that the company was beginning an investigation.

“I told her, ‘It sounds like to me you’re about to become the judge, prosecutor and jury,’” Mr. Magness said. “I said, ‘Please ma’am, don’t turn my son into a statistic. He needs care.’”

Two days later, the company denied coverage for Mr. Bird’s medical claims. The denial letter cited three exclusions, including one for illegal activity, which the letter said was triggered by Mr. Bird’s allegedly “striking the security guard with his motor vehicle and then leaving the scene.”

The denial meant the family could not transfer Mr. Bird to a rehab center where he could have received preventive care and adapted to life as a quadriplegic. The family appealed the denial, but it was affirmed last week.

This time, however, HealthCare Solutions cited “hazardous activity,” not illegal activity, and suggested that a third party, like the apartment complex, should pay the medical bills.

Mr. Bird’s medical claims might not have been denied had criminal charges been brought against Mr. Stone. But Oklahoma has a “stand your ground” law permitting citizens to “meet force with force” if they are attacked.

Steve Kunzweiler, the Tulsa County district attorney, concluded that Mr. Stone’s use of force was justified because he thought his life was in danger. “Mr. Bird might have made choices that might have gone a different way if he had listened to the security guard and obeyed his instructions,” Mr. Kunzweiler said.

Police discovered a vial of marijuana, illegal in Oklahoma, in Mr. Stone’s bag that night, and the results of a preliminary blood test showed that he had cannabinoids in his system.

David Riggs, a lawyer for Mr. Bird’s family, noted that the state’s stand-your-ground law did not apply when “the person who uses defensive force is engaged in an unlawful activity,” such as drug possession.

“The fact is, he was shot in the back as he was fleeing, driving away from this security guard,” Mr. Riggs said of Mr. Bird. “If there was ever a threat, there is no longer a threat.”

Repeated attempts to reach Mr. Stone for comment were unsuccessful. Mr. Bird’s family has filed a lawsuit against Mr. Stone, the security firm that employed him, the apartment complex where the shooting took place, and its property managers.

After the denial of coverage, Mr. Bird was discharged and went to his family’s home in Boley, Okla.

The young man, who required a ventilator to breathe, was cared for around the clock by his mother and grandmother, who fed him, bathed him, helped him cough, turned him in bed to prevent bedsores, and moved his limbs to maintain his range of motion, said Tezlyn Figaro, a publicist speaking on the family’s behalf.

Despite their care, Mr. Bird developed blood clots in his lungs and died on June 30”.

We do know that UK insurers have a clause in their policies regarding criminal activity such as: ‘We do not cover treatment you need as a result of your active involvement in criminal activity’.

The UK situation is slightly different as immediate A&E care would be provided by the NHS, the patient would then transfer to the NHS or private (as required) when they are stable.

We are sure most insurers would judge each case on its own merits and to our knowledge we have not seen a situation like this in the UK. 

However, we would be interested to hear of any example of declinatures such as this.

Gizza job, I can do that.

The New Year is traditionally a time when many people reassess their professional roles and decide a change may be worth pursuing. For many people I suspect this involves looking for a new job – indeed recent research published by the Institute of Leadership and Management (ILM) revealed that 37% of workers say they are planning to leave their current jobs in 2015, a significant increase on the 19% who answered the same way in 2014 and the 13% in 2013.

But what about the financial advisory profession? How many advisers reading this article are considering a career change? I suspect very few although, given the average age of advisers, I wonder if most aren’t looking forward to retirement with some considerable relish. To be honest, I can’t blame those advisers who might be looking for an early exit – this job comes with some significant pressures to deal with whether they are in the form of regulation, increased costs, political interference, constant change, professional development requirements. The list goes on.

Unfortunately having to cope with these ongoing developments and the growing requirements placed on advisers has – in this country at least – somewhat detracted from the attractiveness of financial advising as a career choice. I am always interested in the ‘job reaction’ you get from people when you tell them what you do. How are financial advisers perceived? Are they thrown in the same pot as estate agents or journalists or parking wardens? I hope not given the job advisers do and the focus on quality and service.

Then again, the nature of what a financial adviser is and does has been systematically depowered by the continuous regulatory changes and developments. It is about to become even more confusing for consumers in April when a whole host of pension ‘Guidance agents’ are unleashed on the at-retirement market with only a requirement to have “some pensions knowledge” as the recent Citizens Advice job specification put it.

Of course it doesn’t have to be this way. Last year research conducted in the US by Rapacon placed being a financial adviser as one of the top ten jobs to have in the future. It is clearly a sought after career choice suggesting to me that the profession’s reputation across the pond is not just intact but strong and enticing to those looking at their employment. Can we really say the same in the UK?

So, how can we improve the reputation of the profession, ensure it is attractive to new blood, and develop greater consumer understanding of what advisers do, their value and worth, and why it’s a job worth having? Like most things, I believe it’s important to start with yourself. To that end, it’s about being the best you can be in your individual role which does mean self-improvement, lifelong learning, a commitment to continuous professional development, etc. If advisers are focused on self-betterment, on improving themselves and increasing their own standards, then this will clearly feed into the service they offer which will improve reputations and generate strong feedback and referrals.

Advisers need to be fully focused on their own roles which means not getting into a rut and instead retaining interest in the job and everything about it. Learning more and securing greater knowledge is a fundamental way to do this – we have recognised this for some time which is why we established a CPD library containing both structured and unstructured material which is easily accessible and allows the adviser to continually load up on new information. It will not only help the adviser improve their service offering but feed through into a growing positive reputation for the profession.

A profession renowned for its security, its prospects and the quality of its overall offering will clearly be attractive to those who are working in other areas or have yet to start work. While the legal, accountancy, and banking sectors have been tapping into the graduate market for decades, establishing these careers as worth pursuing, unfortunately the advisory community has not been working at the same level.

If we do want to bring new blood into our community then we certainly need to begin pushing and marketing the profession in a much more focused and structured way. Our professional and trade bodies must work closely together on developing an ongoing campaign that supports individual firms’ own recruitment policies if we are to raise the profile of being a financial adviser and make it stand out from the crowd. This should be a long-term commitment that highlights the positives of the profession and sets out the very tangible and compelling reasons for being part of it.

With the New Year being a time when many people consider what they should be doing next now is certainly the right point to secure our own professions’ future.

 


Life in the old dog yet

From a point where many thought the market might never recover, second-charge mortgages have (some might consider) produced a Lazarus-like resurrection particularly over the course of the last 12-18 months. This was a sector which, immediately post-Credit Crunch, was not just considered the black sheep of the mortgage family but was cast out and thought never to be able to return again.

How times have changed. The resurgence in second-charge lending has been self-evident for some time however if you were looking for some recent statistics I would point you in the direction of those from the Finance Leasing Association (FLA) which revealed that second charge mortgage business in September this year grew (year-on-year) 41% by value and 17% by volume.

It has been something of a remarkable turn-around and if competition is any sign of a sector’s health then you would have to conclude that the second-charge market is currently ruddy of cheek. Not only do we have an increasing number of lenders actively seeking business, but we also have a growing band of ultra-competitive master broker/packager firms all chasing introduced broker business. In not so many words, if you are an adviser looking to be more active in the second-charge market then you will not be short of firms seeking to partner with you.

So, why might this be? Well, quite clearly demand for second-charge mortgages has increased considerably and there are a number of underlying reasons for this, not least the fact that we have large numbers of borrowers either unwilling or unable to remortgage.

The former group might now find themselves on mortgage deals which one does simply not move away from – remember the raft of incredible lifetime tracker rates from many years ago. Savvy borrowers who picked these up – many of which will be paying 1% or less – are not going to be inclined to move anytime soon with rates remaining at record lows. However, this does not mean these borrowers are not in need of capital therefore a second-charge mortgage can be the right option in order to secure this funding. If you wanted another clear sign of the underlying strength of the second mortgage sector at present then you only need look at the remortgage market which continues to bump along the bottom, and probably will do so until those first few Base Rate increases are made.

Like any sector of course, the spectre of regulation does hang heavy over the second-charge market and practitioners and stakeholders would do well to be aware of what is coming over the horizon because it will change the nature of the sector. In September this year the FCA outlined how it will move second-charges from its consumer credit regime to be governed instead by its mortgage rules – this means a considerable (not necessarily unwarranted) upheaval for all those active in this market. Indeed, you get the impression that the regulator has been less than impressed by what’s been going on in the second-charge market up until this point. It wants tighter MMR-esque controls covering sales practices, affordability assessments, responsible lending, handling payment difficulties etc, and the easiest way to achieve this is via the mortgage rules themselves.

Which all means that from March 2016 second-charges will be regulated under the mortgage rules and therefore everyone involved is going to need to ensure they’re compliant with them. Greater regulation equals greater cost for all and therefore we shouldn’t be surprised to see a much changed second-charge market in just over 15 months than we have now. For a start, firms are going to need to get authorised to carry out second-charge mortgage business plus there will be the added necessity of data reporting, etc.

For those advisers considering their second-charge option, the first port of call should probably be the highly active master broker/packager operators. These are the businesses which will be able to provide plenty of background information and support in terms of placing business, not forgetting the fact they have access to all lenders and products at the tap of a button. Those not opting for this distribution method will find themselves having to trawl through many many lender offerings in order to secure the right deal.

The good news is that the second-charge market looks likely to maintain its upward trajectory for some time to come. All the news coming out of the economy and the MPC suggests it will be reluctant to increase rates anytime soon and therefore those borrowers on these incredibly competitive long-term lifetime tracker rates will not wish to move elsewhere. The second-charge market seems destined to benefit from this news for the foreseeable future.

Misdemeanor, cost of conduct and those poppies

RBS announced that it has set aside a further £780m to cover the costs of conduct issues, including the PPI miss-selling scandal.

The news, released alongside its third-quarter results, showed that the bank’s recovery continues despite the ‘misdemeanour’ provisions for past mistakes.

The latest figures from the FCA show that fines levied during 2014 to date are a staggering £313,025,800 with most being collected from banks.

We have seen ‘misdemeanour’ payments and provisions for PPI, currency dealing, LIBOR rate fixing, money laundering, sanction breaches and trading scandals.

And it is always banks!

The top 10 reads like a list of the great and the good with HSBC at the top with a staggering $1.9bn fine for ‘money laundering ‘lapses’.

But the reality of the situation is that banks today are too big to fail, possibly because of ‘customer detriment’ fallout. Can you imagine your high street without a branch of……..well where do you start?

We worry about the restoration of trust in the financial services industry, wringing our hands with the regulator and consumer groups in the search of a way back to trust.

Sir David Walker, the outgoing chairman of Barclays said in late October that big fines on banks were making it harder for the industry to win back public trust and suggested fines were being levied for activities that in the past might have been regarded as acceptable.

Walker said regulators “cannot and should not try to regulate culture” and he may have a point. The FCA is certainly trying to regulate morality, a character trait sadly lacking in some quarters I would venture?

A point to consider going forward could be that the fines are aimed at the perpetrators on an individual basis and restitution a corporate and personal payment. Corporate fines mean nothing at all really. A bit of fiscal naming and shaming followed by a ‘get over it and move on’ attitude. The jailing of low-level offenders to set an example seems to not have done the trick at all when it happens, as that is very rare indeed.

The fact that only one top banker has been jailed for the financial crisis says it all.

Prosecution of white-collar crime, as it is sometimes referred to as, has seen some interesting MI over the last 20 years.

For example in the US, from the various loan scandals of the 1980’s, we saw 890 people convicted and jailed. The recent financial crisis has seen just one.

Says it all really.

On the subject of fines, that were supposed to be used to reduce the regulatory burden on firms that did do the right thing, we hear that part of this weeks banks £2bn Libor rate rigging fines will be used to fund a tour of the Tower of London poppies across the UK until 2018. George Osborne announced that £500,000 would be used “to ensure that people across the country will be able to see this moving tribute over the next four years”. 

All very laudible, but I think it is time for a rethink on how fines are levied, who actually pays them and how they are used. Right now fines are treated as a windfall revenue source to distribute on a political whim for whatever cause is popular with the voting masses.

Osborne said “It’s only right that fines from those who have demonstrated the very worse of values should go to support those who have shown the best of British values.” 

But fines should not be used as a political slush fund to ‘big up’ a government, any government especially in a lead in to an election.

Covering up the military loss of life and limb with a blanket of banking ‘misdemeanours’ demonstrates the very worst of politicians behavioural values, especially from recent administrations of varying hues (who have placed UK troops in harms way with little or no thought for their safety, wellbeing or exit strategy) and is just not on.

The Tower poppies represent a life lost, not a political or regulatory opportunity to look good.

www.panaceaadviser.com

Setting the record straight

As a specialist annuity provider, Just Retirement has had a turbulent time since George Osborne decided to thrown a “hand grenade” at the pensions industry, as Steve Martell, the group’s Director – Development, Intermediary Sales describes it.

Yet with hindsight, Martell believes the freedom of choice now offered to the at-retirement market has done the provider a favour in simply accelerating its growth and product development plans, yet he concedes it’s shock factor.

“Ironically it has probably helped our product development capability because it has just accelerated the plans we already had underway, but we perhaps may not have wanted it quite so quickly.”

Martell believes providers will tend towards a blended product offering, but is confident that secure income providers expanding into the drawdown space will be a far easier challenge than the reverse situation.

“We think we can play in that market.  The challenge will be far easier for a secure income provider with their intellectual capital to bolt on a drawdown offering, but how does a provider of drawdown suddenly create the ability to deliver secure income?”

However the real fallout of March’s Budget announcements and the devil of detail, as revealed this month, will take effect from April and potentially six months after that to really show its impact, he says.

While the provider is responding with new product types, for those not fortunate enough to have access to a financial adviser or some form of financial intermediary or guidance, he does liken the newfound pensions freedom to a ‘loaded gun’.

“It’s slightly disturbing if, as we heard recently, that pensions are now comparable to ‘bank accounts’ because that’s like handing someone a loaded gun and putting their finger on the trigger and saying fire it whenever you like. If they have advice then fair enough, but if they don’t…” he warns.

In-depth consumer research carried out by Just Retirement recently suggested four key themes characterised people’s retirement solution needs: accessing their solutions in a ‘one-stop shop’; having at least some degree of secure lifetime income – even for the wealthy; the ability to dip into their savings at some point in the future; and stable, steady investment outcomes.

With this in mind, while the higher value savers may be well looked after by advisers, Martell spies a huge opportunity for the mass market – those with lower pots of £100,000 or less – suggesting some form of “advice factory” may become more commonplace.

“Although no one seems to have worked out how to do that yet,” he says.

Befuddled by the fall in pension savers exercising the open market option – especially given their newfound freedom, Martell says the mandatory pensions passport concept would be welcome.

“The industry needs to break the dominance of the holding providers. Yet so much has happened so quickly, it will require a lot of intervention. We had a business model that was predicated on organic growth and we’ve had a hand grenade thrown in to precisely where our growth will come from.”

While Just Retirement’s strategy looks set to embrace the more flexible landscape, suggesting it is no longer black and white in terms of the types of solutions offered by any one provider, annuities still hold relevance, he insists.

“If you understand the financial consequence of waiting, then that is fine. If you don’t, the common sense approach is that if you definitely need secure income you should take out an annuity because you will only end up buying the same thing in a year’s time anyway, when yields could be even lower.

 Sam Shaw

www.panaceaadviser.com