Speaking at the CA Summit today, Strauss said we are seeing a “coming together of independent and corporate advice in the workplace,” as the corporate adviser role shifts from taking place at the employer level, to wealthy individuals in the workplace. “Historically advisers have been speaking to directors. We are seeing that coming down very quickly.
He predicted that banks such as Lloyds Banking Group, which owns Widows, and which have historically done little to engage with customers around retirement, will play a much bigger role in post retirement advice in future. This means that in future by the time people had received their guaranteed guidance, they would understand the options available.
He said: “The challenge for advisers is how to pick this up. We need people to understand the value of guidance and products like drawdown need to be made a lot simpler. The aim is to co-ordinate how we co-ordinate how we engage customers in the five year period before retirement.”
He said one of the biggest challenges facing the pensions industry will be engaging with customers who have had a passive experience in the “triple default world” of auto enrolment, default strategies and annuities, which had spawned a lack of engagement and disappointment. Scottish Widows was engaging with customers much earlier, but it was unclear what its 537,000 unvested over 55-year old customers would do next April. Grossing this figure up across the industry, he predicted between 2.5m and 5m people with unvested DC benefits over age 55 who may want to speak to their provider from next April.
He said in house research showed 28 per cent wantied to take cash and 30 per cent “don’t knows.” But attitudes to working in retirement were changing fast, with only 14 per cent not intending to extend their working lives. Digital communication would play an increasing role, including use of video as “people like to see the people talking to them.”