Money

Annuity comparison quotes hit new highs in 2024

Published

5 hours ago

September 24, 2024

Annuity comparison quotes hit new highs in 2024

Pensions technology provider iPipeline has reported a significant rise in demand for annuities among financial advisers.

In the first half of 2024, annuity quotes increased by 12% compared to the same period in 2023, marking the highest demand since iPipeline began tracking in 2013.

This follows a record 60% year-on-year rise in adviser annuity comparisons on its platform in 2023.

iPipeline’s annuities portal now accounts for 25% of all quotes in the UK retirement market.

The company’s November 2023 ‘Building a Better Retirement’ report, produced with Retirement Review, revealed that the average UK saver aged 40 to 66 targets a pension pot of £223,503, yet many fall short.

The average total value of personal pension pots is £167,891, with 23% of savers holding less than £50,000, and 37% having no savings target at all.

The findings highlight the growing importance of annuities in retirement planning.

Greg Neall, chartered financial planner at Wake up your Wealth, said: “This clearly shows a continued return to the annuity market by advisers, which comes as no surprise as annuity rates for those in their mid to late sixties are comparable to sustainable drawdown rates.

“If this higher interest rate environment persists, I believe the rates of annuity quotes will continue to increase particularly for those investors over 70 who have deferred taking their pension pots or have used a drawdown to transition towards a secure income later.”

Paul Yates, product strategy director at iPipeline, said: “We’ve seen advisers are searching for annuities during a time of higher interest rates. We assume, that now rates have started to fall and may continue to do so, these annuity numbers will start to slowly reduce.

It will be interesting to see what happens in the second half of the year (especially with the current market volatility levels). We are unlikely to see a return to interest rates under 1% again, so annuities should remain a key part of an adviser’s retirement toolkit, especially for older retirees who need income guarantees.

“We would also expect to see growth as the number of people with drawdown pots increases and as the age profile of holders grows.

“At the same time, we have a new government that could start to make major changes, and that may impact the way we save for, and spend in, retirement.”

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Money

Paraplanning steps out of the shadows

Published

14 mins ago

September 24, 2024

NewsAdmin

It may be surprising, but it appears more people have considered becoming a senior paraplanner than a financial adviser.

Research from recruitment platform Indeed, with the St. James’s Place (SJP) Financial Adviser Academy, found just 4% of respondents had considered becoming a financial adviser, while 9% had considered becoming a senior paraplanner.

The research looked at attitudes towards careers among over 4,000 UK workers, highlighting a good salary, work/life balance and the opportunity to work from home as factors that create the ideal role.

This data was combined with job searches to produce a list of 10 of the best careers people have never considered. Senior paraplanner was second on the list, while financial adviser was fourth.

Broad appeal

This may go against the grain of expectations, as you would think advisers would have a higher profile among the general public as they are more client facing.

However, Gee Foottit, senior manager, partnerships, at the SJP Academy, points out we cannot draw conclusions about the level of public awareness for either role, as the research only shows whether respondents had considered these careers for themselves.

Foottit acknowledges the common perception is that advisers have the dominant career but people also have out-of-date perceptions of advisers as male economics graduates in suits who work in the City.

“Women make fantastic financial advisers,” she says. “The skills required can be more difficult to train people in – things like emotional intelligence, being inquisitive and feeling at ease to ask questions.”

Foottit says that while men – who outnumber women as advisers 80/20 – can certainly have these attributes, more women tend to already possess them.

It is widely accepted paraplanning has more of an equal gender split and commentators suggest this is because there are elements that appeal to everyone.

People whose main focus is to drive their career forward have pathways to follow, perhaps moving into financial advice.

Versatility and flexibility

The versatility of paraplanning also enables people to flexibly juggle work with the demands of bringing up children, while still having job satisfaction and options to progress in the future, when their families are more self-sufficient.

Although being an adviser also offers many of these benefits, there is a feeling the advice role is more defined, while paraplanning can be moulded around the needs of businesses and individuals.

Liam Chapman-Lyes, senior paraplanner at Succession Wealth, believes this is why the gender split is more balanced in paraplanning relative to advice.

“Paraplanners have worked from home since Covid – technology has opened up the role across the whole country rather than locally. And you don’t have to worry about client calls and working out of hours,” he says.

“You can do your hours, switch off at the end of the day and it’s less stressful.”

That is not to say men do not appreciate the flexibility and versatility that paraplanning offers. Chapman-Lyes has spent the last seven years building a career in paraplanning.

At Succession Wealth, there are different roles within paraplanning, such as associate paraplanner and senior paraplanner. This enables the firm’s paraplanners to occupy ‘light advice roles’ where they combine technical work behind the scenes with client engagement or cashflow planning.

“Paraplanning didn’t really exist 20 years ago but it has developed so much in the last 10 years. Now there are pathways for qualifying as a financial planner or staying in a paraplanner role – you can choose,” says Chapman-Lyes.

“I have bit of client contact – I speak to clients over email, assist on drafting the advice and cashflow modelling – but there’s lots of scope to do more.”

A growing profession

While hosting the Personal Finance Society’s (PFS) Purely Paraplanning Conference in April, Altus Consulting platforms consulting director Amira Norris was struck by the realisation that the paraplanning community is ‘growing and thriving’.

“Once seen as a stop gap to becoming an adviser or a way to promote administrators, paraplanning has evolved over the last decade or so to become a respected and valued career in its own right,” she says.

“The main institutes now all recognise paraplanning as a career path, with dedicated qualifications pathways and initiatives, such as the PFS Paraplanning Panel and the CISI paraplanner award.

“The role of a paraplanner has become invaluable to advice businesses, as the need to keep up with the regulatory and technical complexity of financial planning increases,” she says.

“We are also seeing offshoots of specialisations in areas such as cashflow planning, complex pension reviews and intergenerational wealth expertise.”

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