Retirement Income: Planning for Profit Peter Cantrell.

Retirement Income: Planning for Profit

Peter Cantrell

http://www.bankhall.co.uk/default.asp

Agenda

Annuities and your business

Refining your advice process

Creating profitable business

Being proactive

Just a reminder


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


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


*Source: Just Retirement** Times Online March 2009

Agenda




Being proactive

Just a reminder


“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


+34% above

standard rate



+44% above

standard rate


Underwriting – things aren’t always as they seem!

Just be aware of

Alcohol

ADLs

Ex-smokers

Post codes


“Everybody qualifies for an Enhanced Annuity unless you can prove otherwise.”

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




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




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

Agenda




Being proactive

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

Retirement Income: Planning for Profit Peter Cantrell.

Documents

Transcript of Retirement Income: Planning for Profit Peter Cantrell.