retirement income: planning for profit peter cantrell
TRANSCRIPT
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Annuities and your business
Let’s face facts:
Over 1 million people retire each year*
By 2012 the Annuity market is predicted to be worth £20bn – an immediate and real opportunity**
Potentially, £500m p.a. of retirement income is lost each year***
We have seen changes in the “Variable Annuity” sector
Maximum income from USP impacted by changing gilt yields and fund values
Annuities are the “peace of mind” option in volatile times
Providing certainty where it is needed – and representing good value
Source: * Mintel Report, Annuities and Retirement Income Solutions, 2007 ** DC World, July 2008 ***Just Retirement, based on ABI data Q4 2008
Male Aged 65 – Smoker, HBP & High Cholesterol
Purchase Price
Payment Frequency
Annuitant's Annuity p.a.
40,000.00 Monthly 3,578
8.94% Yield
Source: Just Retirement 30/04/09
Annuities – value for money
Annuities and your business
What’s the catch?
OMO usage below potential at 37%*
Average pension funds static at £28,893*
IFAs write on average less than one annuity per month**
*Source: ABI ** Just Retirement
Annuities and your business
*Source: Just Retirement** Times Online March 2009
Annuities and your business
*Source: Just Retirement** Times Online March 2009
Annuities and your business
*Source: Just Retirement** Times Online March 2009
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Refining your advice process
Refining your advice process
“Everybody qualifies for an Enhanced Annuity unless you can prove otherwise.”
Refining your advice process
“Everybody qualifies for an Enhanced Annuity unless you can prove otherwise.”
Qualifying Conditions
Why those three questions are important
+46% above
standard rate
Source: Just Retirement
Why those three questions are important
+34% above
standard rate
Source: Just Retirement
Why those three questions are important
+44% above
standard rate
Source: Just Retirement
Underwriting – things aren’t always as they seem!
Just be aware of
Alcohol
ADLs
Ex-smokers
Post codes
Refining your advice process
“Everybody qualifies for an Enhanced Annuity unless you can prove otherwise.”
Refining your advice process
Refining your advice process
Refining your advice process
Refining your advice process
AEGONAvivaAXA Canada Life Friends ProvidentJust Retirement Legal & General LV=MGM AdvantagePartnershipPearl Group PrudentialScottish WidowsSkandiaStandard Life Zurich
Average Transfer time?
8 Days
Origo Options – what’s next?
Increasing the number of providers using the service
Extend the product range supported by the service
Simplified age verification
Removing the need for Discharge Forms
Even faster transfer times
FSA encouragement to sign up to Options
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Creating Profitable Annuity Business
Fee or commission?
Fees:
Commission
Flexible Commission
40% of your business could be on enhanced terms* – and that usually means enhanced commission too!
*Source: Watson Wyatt
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Being proactive
Looking after existing clients
Target and talk to those approaching retirement
Talk to your clients in USP, who are taking income:
HMRC limits changed?
Health changes?
Exit strategy?
Talk to your clients in USP who aren’t taking income:
Do they now need to draw on fund?
Fund value?
Health changes?
Past Investment Performance
Outlook
Current Investment strategy
Gilt Yields
Income requirements
Attitude to risk
Changes in circumstances (health)
Enhanced annuity rate?
The USP Review Process
Being proactive
Finding new clients
Your own clients!
Referrals – spouse, family, friends
www.pensionsadvisoryservice.org.uk
www.unbiased.co.uk
Other IFAs
Professional Connections
Target local government, charities, job centres
Being proactive – in the longer term
Being proactive – in the longer term
Being proactive – in the longer term
Agenda
Annuities and your business
Refining your advice process
Creating profitable business
Being proactive
Just a reminder
Just.... a reminder
Just.... a reminder
Just.... a reminder
Handset Question
I would like Just Retirement to switch me from paper based to e-commission statements
1 Yes - please contact me to arrange this
2 Maybe – please send me more information and a sample statement
3 No thanks
Handset Question
Would you prefer a single point of contact within Just Retirement throughout the application process?
1 Yes
2 No
Handset Question
Would you prefer Just Retirement to provide updates throughout the application process directly to the client?
1 Yes
2 No
3 Only if you sent copies to the IFA for information
Just – the difference matters
Our Annuity Advice Profitability CalculatorBusiness Profile
Number of cases written 12
Number £100,000+ 1 100000
Number £50,000-£100,000 2 150000
Number £25,000-£50,000 6 225000
Number £15,000-£25,000 2 40000
Number under £15,000 1 7500
522500
Sales Process Hours Worked:
Task Administrator IFA
Requesting Illustrations 1 0
Retirement Options Report 1 0
Meeting Preparation 0 1
Client Meeting 0 1
Post Meeting Administration 0.5 0
Post Sale Meeting 0 1
Total Time (Hrs) 2.5 3
Cost per Hour (£) 50 125
125 375
Cost per case (£) 500
Standard Annuities 1%
Income Generated (£) 5225
Total cost to company (£) 6000
Net Profit (£) -775
40% Enhanced & 3.25% Commission*
Income Generated (£) 12017.5
Total cost to company (£) 6000
Net Profit (£) 6017.5
*Assumes 40% of commission is enhanced
Handset Question
Would you like us to send you a copy of the Annuity Advice Profit Calculator
1 Yes please
2 No thanks
In summary
Work out how to tap in to the £20bn opportunity – profitably!
Review your processes
Benefit from both at retirement and in retirement advice
Clients in later life will become increasingly important
Ask the experts for help and support
Marketing
Profit calculators
Service