People in post-retirement are currently faced with advisers lacking the knowledge to advise them properly, writes Ian Owen
The need for post-retirement advice is set to grow rapidly as the baby-boomer generation ages. There is concern that too few advisers have either the knowledge or experience to advise effectively on many retirement and post-retirement issues.
It is estimated that, currently, only 18% of people receive an impaired annuity. Partnership Assurance's experience shows that it should be 40% for single annuitants and nearer to 50% if joint life annuities are taken into account. It is not that the adviser is deliberately mis-advising the customer, but rather they may lack the required knowledge.
Reality
Like the pre-retirement sector, the needs of the community vary significantly. There is a broad spread of financial solutions covering annuities, long term care, equity release, investment income in retirement, and tax planning. But, to date, advisers have received little support or incentive to fully educate themselves about the products.
To ensure brokers are up to speed with the post-retirement community, the Personal Finance Society (PFS) recently launched the Retirement and Care Faculty. The Faculty is a sub-group of the PFS and aims to make sure that practitioners advising clients, both at retirement and post-retirement stages, are continually developing the correct technical and educational knowledge.
Members of the Faculty will benefit from a number of measures. The Faculty will act as the centre of technical excellence, determining standards of professional good practice and ensuring this through a defined standard of conduct, which will act as guidelines for the practitioner and keep them on an even course.
The Faculty will also provide a tailored Continuous Professional Development (CPD) scheme that will meet the needs of brokers, pensioners and the pensioner's employer. It will facilitate learning and CPD programmes for advisers, ensuring current and relevant examination offerings for staff in relevant areas. It will provide a programme of structured learning support, while also providing relevant input into examination programmes to ensure they are suitably tailored towards the post-retirement insurance market.
In addition, the new Retirement and Care Faculty will comment on and influence policy debate, acting as a spokesperson for the broker community and encouraging issues to be addressed. The organisation will also act as a research medium for topical subjects and those subjects that are affecting the market at any given time.
The Faculty has three main objectives. Firstly, to assist the PFS in developing an annual programme of educational events for those practitioners specialising in 'retirement and care'. This will help advisers in the market establish key topics and raise pertinent issues opening them up for debate and possible solutions.
Secondly, its objective is to determine and agree whether the PFS should be lobbying on any issues that will aid the development of the post-retirement planning and care profession.
Finally, the Faculty aims to help the PFS develop guidelines for practitioners in the market, in particular for advisers specialising in post-retirement planning advice, and those specialising in care fees planning advice.
The Retirement and Care Faculty raises awareness of an issue that needs to be addressed; which is that, up until now, practitioners providing vital financial planning advice to retired people have not been given the opportunity to advance their learning or speak out using a public organisation as a 'voice'. As a result, many issues affecting the retirement area are not being raised or addressed. In the meantime, practitioners are also lacking the knowledge and experience to advise their clients properly. With the new Faculty, advisers will have a focus within their professional body that can provide them with both training and advice, as well as act as a sounding board for the sector. For these reasons we welcome the launch of the Faculty.
Ian Owen is chairman of Partnership Assurance
