The positive surprise for us was the roll out of the Retirement Income Advice Assessment Tool. Based on feedback we get from advisers, the mainstream risk profiling companies have been slow to create comprehensive tools for assessing suitability in retirement.
The regulator’s setting out – explicitly - of what should be considered in that process will help the risk profiling software firms update or create more useful tools for advisers. Or advisers can download, access and use the tool directly themselves to create their own processes.
While the regulator remains non-prescriptive around investment solutions, this clarity around expectations for what should be considered in the retirement income advice process is very welcome.
Next steps for advisers
The regulator has set out clear next steps for adviser firms: Firstly to address the review’s findings as regards key requirements, control frameworks, the
Consumer Duty, good practice and improved management information.
Secondly, to review and integrate and the FCA’s comprehensive Retirement Income Advice Assessment Tool.
Thirdly to consider the FCA’s article on cashflow modelling to improve how this is used to improve advice.
The right place for advisers to explore, evolve and document their retirement income advice process is in their centralised investment and retirement proposition documentation.
If you have a good one in place already, it should be an “upgrade” to ensure it meets the clearer standards set out in the review. If you don’t, then it’s high time to get it sorted.
Henry Cobbe is director and head of research at Elston Consulting
