At the end of February 2012, ILC-UK, with the support of Partnership, published a report which explored the impact of the Retail Distribution Review (RDR) on people with small pension pots. Whilst the report supported the principles of the RDR, it expressed worries about the creation of an ‘advice gap’ where the poorest and least well-off pensioners might fail to receive critical financial advice. Since the publication of the report, Government, the FSA and HM Treasury have taken forward a number of positive policy initiatives, some of which addressed some of the issues in the ILC-UK report. The ABI has developed a new code of conduct for members which will support the consumer to take the open market option. The DWP has been developing “operation big pension pot”. And the FSA has published guidance on simplified advice. However, the problems highlighted in the ILC-UK report are far from solved and there remain a number of immediate challenges. The combination of the end of compulsory annuitisation, the introduction of the RDR, the growth in the number of small pension pots and the introduction of auto enrolment will require further policy action in the short term, and certainly before 1 January 2013. This summit was convened with a view of creating a policy consensus to tackle the challenges ahead. Following the Summit, ILC-UK will publish a report which sets out the recommendations which emerge from the event. The Retirement Income Summit focused on three specific themes. Senior representatives from Government, industry and consumer organisations debated Post RDR financial advice may be beyond the means of the average person. How can we fill the advice gap? People with average sized pension pots are entitled to reasonable outcomes. How can we improve the pensions annuity process for the consumer and industry? Good regulation protects the consumer but it must not inadvertently damage the potential of products and services to increase pensioner income? How can we ensure that the length and complexity of communications required by legislation does not damage communications?

1. Retirement Income Summit
20 June 2012
#retirementincome

2. Welcome
Baroness Sally Greengross
Chief Executive
ILC-UK
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3. Gregg McClymont MP
Shadow Pensions Minister
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4. Lord Kirkwood
Former Liberal Democrat Spokesperson for
Work and Pensions 2007-10
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5. Nigel Waterson
ILC-UK Trustee and former Shadow
Pensions Minister
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6. Post RDR financial advice may be beyond
the means of the average person. How
can we fill the advice gap?

7. Steve Groves
Partnership
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8. Post RDR financial advice – How
do we fill the gap
Steve Groves
18 June 2013

9. Backdrop
 Start from a low base for average consumers
 Around 40% of people shop around
 Nearly 100% of those with pots over £100k shop around
 RDR will make advice more expensive
 By removing cross subsidies from big funds to average
funds
 Are we heading for an Annuity Apartheid?
 This isn’t just an RDR issue, it exacerbates an existing
market failure
 Therefore its lazy to simply blame RDR
 Need Industry, Government, Regulators, Insurers and
IFAs to work together

10. 5 Recommendations
 Lets all take the advice gap seriously – One key measure
of our industry is how it works for ordinary people
 Lets find a default option that can make simplified advice
work for average funds and simple needs
 Lets examine proportionality in regulation and see if we
can make things simpler for customers
 Life Offices need to use these changes to make it far
simpler and far less intimidating to shop around
 Advisers need to develop efficient, differentiated solutions
to meet the various customer needs and wants.
“The time for blaming each other for market failures has
gone, this group could work together and deliver better
consumer outcomes if we choose to – I’m up for it, I’m
pretty sure Aviva are up for it…….”

11. Tom McPhail
Hargreave Landsdown
#retirementincome

12. Roger Marsden
Aviva
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13. Coffee Break
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14. Good regulation protects the consumer
but it must not inadvertently damage the
potential of products and services to
increase pensioner income. How can we
ensure that the length and complexity of
communications required by legislation
does not damage communications?

15. Steve Lowe
Just Retirement
#retirementincome

16. Jeff Prestridge
Mail on Sunday
justgiving.com/jeff-prestridge
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17. Dean Mirfin
Key Retirement Solutions
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18. Dean Mirfin

20. People with average sized pension pots
are entitled to reasonable outcomes. How
can we improve the pension’s annuity
process for the consumer and industry?

21. Jane Vass
Age UK
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22. Reasonable outcomes for modest savers
Jane Vass
ILC-UK Retirement Income Summit
20 June 2012

23. What is average?
Distribution of total wealth in DC funds across individuals with at least one DC pot
Source: IFS, Fund Holdings in defined contribution pensions, 2012

24. Our priorities
• Making it easier to move between all parts of the
retirement income process
• Improved transparency
• Fairer treatment for small savers
• Better value for all savers
• Innovation in the interests of consumers

25. Alan Higham
Retirement Angels
#retirementincome

26. International Longevity Centre UK
& The Actuarial Profession’s
Retirement Income Summit
Chartered Financial Planners

27. Overview
Enlighten
Interest Educate
Keep it short Keep it simple
Validate Implement
Make it safe Make it easy
Fulfil
Annuity Direct is a trading name of Annuity Direct Limited Chartered Financial Planners
Registered in England and Wales no. 06121251 at Pascall House, Cothey Way, Ryde PO33 1QT
Independent Financial Advisers authorised and regulated by the Financial Services Authority

28. Ideas for safe & easy
• Default to check ceding scheme
- 1 in 7 could lose out otherwise
• Agree standard discharge process
- Fidelity & Scottish Life good practice
• Recognise good behaviour
• Challenge bad & resolve
Annuity Direct is a trading name of Annuity Direct Limited Chartered Financial Planners
Registered in England and Wales no. 06121251 at Pascall House, Cothey Way, Ryde PO33 1QT
Independent Financial Advisers authorised and regulated by the Financial Services Authority

29. Your Retirement, Your Choices.
Make sure you make the right ones.
Tel: 0500 50 65 75
Email: info@annuitydirect.co.uk
Web: www.annuitydirect.co.uk
Chartered Financial Planners

30. Dr Yvonne Braun
ABI
#retirementincome

31. Only a minority switch provider –
and fewer of those with smaller pots
80%
70%
60%
50%
40%
30%
20%
10%
0%
Internal Annuities External Annuities
Source: ABI quarterly long-term business survey, Q1 2012

32. How can we improve the process for small pots?
The ABI Code of Conduct on Retirement Choices will ensure our members:
 Provide clear and consistent communications to ensure customers are able to make informed decisions
 Highlight different types of retirement income, particularly enhanced annuities
 Clearly signpost customers to sources of advice and support, from regulated advisers and others
 Establish transparency in the annuity market so that it is more easily understandable and accessible
What else will make a difference?
 Consistency across all parts of the industry
 A solution to the small pots problem which increases pot sizes

33. “Defined ambition”
Mike Le Brun
Policy Adviser to the Pensions Minister
#retirementincome

34. Closing Panel Thoughts
Steve Groves
Partnership
Roger Marsden
Aviva
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35. Retirement Income Summit
20 June 2012
#retirementincome