Introduction
Pensions have always been a crucial part of financial planning for retirement in the UK as we know. Over the years, your clients can accumulate multiple pension pots, especially if they have changed jobs frequently. Managing multiple pensions can be complex, which is where our pension switching, and consolidation software comes into play – we allow you to do this simply and quickly. Here we explore the benefits, risks, and processes involved in switching and consolidating pensions in the retail marketplace. Selectapension, has been a key element to thousands of advisers offering over the years, our system makes the process simple and easy for the user and we research across the marketplace in one analysis.
Pension Switching and Consolidation made easy
At Selectapension, we see over 50% of cases involving multiple schemes being consolidated into a new scheme. Using our software can vastly increase efficiency and saves you time on the analysis process. You can handle consolidation of multiple schemes, which involves merging multiple pension pots into a single plan. We can help make this process simple thus making the management of the clients retirement savings a much easier prospect. This will involve transferring funds from an older, possibly underperforming pension plan to a newer one with better growth prospects, lower fees, or more suitable investment options.
Reasons why advisers consider Pension Switching with Selectapension:
Better Investment Performance**: Some pension schemes offer a wider range of investment options or have a history of better returns. Switching to a scheme or fund with better growth potential can increase your retirement savings. You can always review the funds rather than switch products – easy to do with our software across the whole market.
Lower Fees**: High fees can have a huge impact on a client’s pension savings over time. We can help you demonstrate the plan charges and any lower management fees across the marketplace in one easy analysis. We include a projection calculator so you can base the analysis on charges create your own illustrations – no waiting for the Provider to reply!
Improved Flexibility**: Modern pension schemes often offer greater flexibility in how clients can access their money, including more options for Flexi access drawdown or lump-sum payments (UFPLS) We can refine your research to only these products.
Ethical or Sustainable Investments**: A key area right now for many clients so we have included this feature for any analysis to only include the right products.
Enhanced Retirement Planning**: Our software can show how your clients investments will look in the future, you can also include an annuity quote and sustainable drawdown in the analysis.
The FCA require you to do a full analysis on cost, features and viability of the new provider – we offer an “all of market” or restricted version depending on what you require. Our tools can help you quickly assess these factors in less than 20 minutes – no waiting for a paraplanner to return your reports.
Benefits of Pension Consolidation
Simplification**: Managing one pension is easier than managing multiple pots. Consolidation reduces paperwork and simplifies tracking your clients retirement savings. A case with 2 schemes can take as little as 15 minutes to produce.
Cost Efficiency**: Multiple pensions might mean they are paying multiple sets of fees. Consolidating into a single plan can reduce these costs greatly.
Better Investment Strategy**: With all your clients funds in one place, you can have a more holistic investment strategy, rather than having different pots to manage with different providers that might not complement each other.
Clearer Retirement Planning**: Having a single pension pot makes it easier to see the total retirement savings and plan accordingly. You can get a better picture of their future income and making informed decisions easier to demonstrate.
Risks and Considerations
Exit Fees**: Some older pension schemes may charge exit fees for transferring your funds. It’s important to calculate whether switching or consolidating will be financially beneficial after accounting for these costs. Easy to show on our software.
Loss of Benefits**: Certain pensions, especially older ones, may have valuable benefits such as guaranteed annuity rates. These benefits might be lost if they switch or consolidate, so it’s crucial to understand the implications. You can demonstrate to a client easily the benefits of a new scheme by using our comprehensive feature selection area.
The Process of Pension Switching and Consolidation
Review Your Current Pensions**: Start by gathering all the relevant pensions and their performance, fees, and benefits. If you are using a back office/CRM such as Intelliflo or Xplan you can easily bring data through using one of our integrations in a few clicks – no rekeying of data! You can even run a case based just on charges using our software so no need to wait for the providers to reply.
Compare Options**: We offer “All of market” research across all Pension product types including:
- Platforms
- Personal Pensions
- SIPP
- Buy Outs
- Stakeholder
You can also include product features, funds from the whole of the UK and adviser fees all in one analysis – no need to run multiple reports. The fund universe from Morningstar and Providers directly, With Profits funds and Company Profiles and Financial strength ratings from AKG, Bespoke product charge library, MPS performance and availability, Award winning support team and free training.
Conclusion
Our software can help demonstrate significant benefits in terms of cost savings, improved investment performance, and easier management of your clients retirement savings. However, it’s important to carefully consider the risks, especially potential loss of valuable benefits and the impact of exit fees.
Request a free 30 minute demonstration and trial by clicking here.