"Contrary to media hype, robo-advice isn’t here to put financial advisers out of a job! It’s instead a tool which is complementary to financial advisers’ services."
FR: The retirement sector has seen instrumental changes over the past 12 months – how do you see the market evolving over the next year?
The biggest wave in all this has come from auto-enrolment which is now in the advanced stages of roll-out, where even the micro-companies are now on board. We now expect to see auto-enrolment face its biggest test: are people going to be persuaded to save enough to secure a comfortable retirement?
Then there’s the Lifetime ISA set for release in April, which is an important development within the market, it’s certainly going to open up new possibilities for millennials, hopefully also making them realise that pensions aren’t something to put off thinking about until you reach retirement, the earlier you start saving, the better. We expect the LISA to be used predominantly by house deposit savers and when it comes to pensions, we would generally advise savers to consider a workplace pension first.
On the whole, we think that it’s extremely important for people to have the right information and tools to make informed decisions when planning for their retirement. This is what lies at the core of our fundamental aim of making financial advice affordable and accessible to everyone.
FR: What are the benefits of robo-advice and what would you say to advisers who are worried about the growth of robo-advice?
Contrary to media hype, robo-advice isn’t here to put financial advisers out of a job! It’s instead a tool which is complementary to financial advisers’ services. By its nature robo-advice is robust and consistent, which means that often it can be more reliable than human judgement alone. For instance, we’re currently developing a robo-paraplanner which aims to take the brunt out of the heavy admin that comes with retirement advice. It will help free up advisers’ time so that they can deal with more complex issues and support more people.
Robo-advice is part of the solution to the ‘advice gap’. The key role for robo-advice is to provide access for those who have no-one to turn to for financial advice and have historically managed without.
FR: How do you see technology continuing to evolve in the pensions market?
Firstly, I think it’s important to emphasise the growing demand for technology within the pensions market. Take the way banking has evolved over recent years, many people rarely visit their bank branch, it’s quicker and simpler to pull out their phone and manage their finances on an app. The reality is that this is now the way most of us consume information. We think that those operating within the pensions market have no choice but to acknowledge this and keep up.
There’s been a lot of media attention focused on shortage of advice providers in the UK when it comes to financial planning - evolving technology is what will close the gap. Robo-advice is already paving the way as we see an increasingly diverse and advanced range of tools from workplace pension providers appear on the market. Technology is all about accessibility and exciting advances are being made all the time. We, for example, have recently released a mobile-friendly version of Pension Wizard, with the user experience placed firmly at the centre. I think we’ll see more of this throughout the industry as technology based solutions become more mainstream.
FR: Do you support the introduction of a Pensions Dashboard and what features would you like to see offered to best support savers?
Absolutely. The Pensions Dashboard is undoubtedly a hugely positive step towards providing savers with clarity around their pensions, as well as encouraging them to put time and thought into planning for their financial future.
The feature we would most like to see offered to support savers is the acceptance of an electronic signature to allow pension advisers to access the dashboard as well. This visibility would make it much more straightforward to move funds around. It would also increase the commercial pressure on providers to look after the best interests of their customers.
FR: How can equity release be better integrated into retirement planning, and what benefits would this bring?
For many people in the UK, their two biggest assets by the time they retire are their pension and their home (if they are a home owner). Our vision is to create an online adviser that helps people optimise both these assets to enable people to access the most comfortable retirement that they can achieve.
FR: If you could see one headline about retirement in 2017, what would it be?
'More people than ever before have access to financial advice' or 'Online financial advice drives massive savings upsurge'.