11 January 2016 GBST, the wealth management and broking technology specialist, is calling on the pensions industry to urgently develop more flexible pension freedom propositions following recently published figures from the FCA.
In the recently published FCA report – Retirement Income Market Data – which collected retirement income data for the second quarter immediately post implementation of pension reforms, some worrying trends have emerged around the choices made by consumers accessing their pensions.
Of the 178,990 pensions accessed during the period July to September 2015, 68% were fully cashed out. Only 32% were used to take an income after tax free cash.
Robert De Dominicis, CEO of GBST, said: “We are in a situation in the UK where there is a dearth of appropriate pension income options available at the time when there is greatest demand. In the absence of clearly communicated flexible alternatives, it seems clear to me that people accessing their pension pots – especially those with pension pots below £30,000 – are being effectively forced to take benefits in a sub-optimal way. This frustrates me because proven, and quickly deployable technology is already available, from GBST and other technology providers that enables the development of more flexible retirement income options.
“Fortunately, there is evidence of some providers investing in smart technology to offer enhanced pension income choices. Recently GBST tailored its award-winning Composer® solution for retirement specialist Retirement Advantage to deliver a new and innovative retirement planning product to market quickly and cost effectively.”
Craig Fazzini-Jones, chief operating officer, Retirement Advantage, said; “We have seen significant change over the past year, with the market expecting providers to deliver innovation. Our reply has been rapid, innovative and reinvigorates the market.
“Research consistently evidences people want the security of a guaranteed income, the ability to withdraw ad-hoc lump sums, the opportunity to grow the value of investments and leave a legacy, all within a product which minimises tax.
“The Retirement Account, which runs off GBST technology, is our response. We have delivered something which is genuinely different, offering the security, flexibility, and access clients are looking for from one product.”
GBST Wealth Management has an established track record of providing flexible, configurable, safe technology to the retirement market. The flexibility of the Composer® platform and its capability to support and administer different products including annuities and income drawdown side-by-side, allows Retirement Advantage to continue to develop its retirement product range to meet evolving customer needs and build competitive advantage within the changing regulatory environment.
Mr De Dominicis said: “We would urge those providers serious about delivering suitable retirement income options to further invest in technology to meet the clear urgent market demand. Delivering reliable technology solutions to challenging timescales is a crucial differentiator in a fast evolving environment. The majority of GBST technology integrations are completed within 12 months.”
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About GBST – www.gbst.com
GBST is a provider of software and services to the global financial services industry. It has more than 25 years’ experience delivering innovative, robust and reliable solutions for capital markets, securities processing and wealth administration. Established in Australia, where over 90% of adviser investment business is carried out through wraps, GBST is the leading provider of wrap platform solutions in its local market with in excess of A$250bn under administration.
About Retirement Advantage – www.retirementadvantage.com
Previously known as MGM Advantage and Stonehaven, Retirement Advantage can trace its roots back to 1852. In 2015, the company changed its name to Retirement Advantage, merging the equity release and retirement income divisions.
The company specialises in retirement, with award-winning expertise developing products which can help people make the most of their retirement savings and/or the value in their property.
Products include The Retirement Account, which blends a drawdown pot, cash account and guaranteed annuity in one product under drawdown rules, the Guaranteed Annuity, providing the best possible guaranteed lifetime income for individual circumstances; the Flexible Income Annuity, which offers the opportunity for retirement income to grow; and equity release products, which allow homeowners the opportunity to release cash from their home without having to move or give up ownership.
Our Equity release products are lifetime mortgages. To understand the features and risks ask for a personalised illustration.
Inflation will reduce how much your income is worth over the years. The value of Investment linked Annuities can fluctuate. Income could go down as well as up. Taking income or withdrawals in excess of growth may result in the fund running out quicker than expected. Taxation rules and regulations may change in the future.
Retirement Advantage is financially strong, as rated by AKG (an independent company that specialises in providing ratings for the financial services industry).
Retirement Advantage is the retail brand for a group of companies which manages assets of almost [£1.8bn] (as at December 2015).