Abridged advice service launched

Aviva’s Financial Advice service will start to offer an abridged advice service, for people who need advice about their Defined Benefit pensions.

This new service will help to bridge the Advice Gap in the UK, where over 30% of adults aged 55 or over need financial advice, but don’t get it¹. 

The service will focus on planning and fully understanding customer needs at the outset, so they can make an informed decision whether or not they need to proceed to full advice.

Mary Harper, Managing Director of Aviva Financial Advice explains, “Previously, if someone came to us to ask about the suitability of transferring their DB pension, they would have to go through the whole advice process even if the recommendation at the end was not to transfer. Offering abridged advice means we can take customers through  a much simpler process to understand if transferring is not the right thing for them in the first instance.  More broadly, we understand the  different levels of support that people need – from information gathering to full advice - and we’re tailoring our proposition so that a broader set of customer needs can be met.” 

The government’s own figures show that a minority of people – 44 per cent – feel they understand enough about pensions to make decisions about saving for their retirement. This figure has not shifted in a decade.2 Figures from the Financial Conduct Authority (FCA) confirm the advice gap – although 4.5m received financial advice in 2018, this is out of an adult population of 50m which shows that the vast majority of people are not taking financial advice².

Mary Harper adds, “Customers need advice on their DB pensions in order to be able to properly review the whole of their wealth and retirement strategy. It is an incomplete picture without considering what is the best choice for them if they have a DB pension as part of their retirement savings.”

More generally, financial advice processes have been impacted by social distancing restrictions during the Covid pandemic,  and the industry has seen the introduction of more digitised processes and a departure from the traditional face-to-face adviser / client meetings of old. 

Mary Harper comments, “In some ways the restrictions we have all faced this year have only accelerated what we were likely to have seen over the next few years anyway. Businesses have adopted new ways of working to remain accessible to customers and the financial advice sector has seen this too. 

“We don’t believe advice will be 100% face-to-face in the future – the experience is already becoming much more digitised and designed around what works best for each individual customer.  We’ve already digitised many of our processes during the pandemic and will continue to do so going forward.

“We’re also looking into a ‘Simplified advice’ offering - providing advice to customers who have a much simpler set of requirements, such as ‘am I in the right funds?, should I bring two pensions together?, or how can I maximise employer contributions?’.

“We’ll provide this through a simpler digitised model at a lower cost, which we can offer through online triage and fact-finding, with an adviser touchpoint (typically phone-based) at the point of decision-making.”

-ENDS-

Sources

¹ www.fca.org.uk/publication/research/famr-interim-consumer-research-report-2018.pdf

²www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth
/datasets/earlyindicatorestimatesfromthewealthandassetssurveypensions

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