2nd July 2013

Scottish Life Retirement Summit

How our At Retirement proposition can help advisers.

Following our first visit to the Retirement Summit, Business Development Manager, Fiona Tait, answers some common questions about our income planning tool and At Retirement proposition.

Being Summit newcomers we decided to present a mixture of market information and an update on the Scottish Life At Retirement proposition.

This included our income planning tool which uses stochastic modelling to provide a measure of the sustainability of different income levels within a capped drawdown arrangement.

Fortunately neither our Regional Sales Manager, Sarah Scott, or myself had to explain any of the hard sums that back up our assumptions. We brought our very own actuary, and the creator of the modeller, Scott Manson to answer the (very) in depth questions about how it works.

• Does the tool allow for possible changes to annuity rates and GAD limits? Yes.
• Does the tool consider different patterns of investment returns? Yes.
• Does the tool include assumptions for future deterioration in health? No – health outcomes are far too client-specific to make sensible assumptions.
• Last, but not least, can it produce written output for the adviser's file? Definitely yes.

Feedback from the workshops sessions was almost universally positive, although we have taken note that some advisers would have preferred less product-specific material.

The main challenge came from one of the main platform speakers. Although he didn't mention Scottish Life by name, he stated that a 71% probability of sustaining a given level of income was unhelpful and we should try to use simple terms such as "good" and "unlikely" for clients to be able to understand.

Scott's answer? One person's "good" is another person's "OK", or even "bad". A percentage figure is definitive.

71% could be acceptable in some cases and unacceptable in others, but it's up to the client and their adviser to decide based on their own individual circumstances.

My own view is that I do not believe it's beyond the wit of most individuals, particularly those who have managed to accumulate very decent pension assets, to understand the concept that 7 chances in 10 is not as good as 9 in 10, and is better than 5 in 10.

So we stick by our numbers.

Oh, and we were also the only group to hold our sessions in the garden.

Many thanks to the advisers who came and participated in our sessions, your feedback has been noted and will be acted on. Thanks also to Money Marketing for organising a very worthwhile 2 days.

Further information

We've developed a range of tools and support material to help you determine the right approach for your clients as they reach retirement. Visit our dedicated webpage to find out more.

If you'd like to discuss income drawdown as a suitable retirement option, please contact your usual Scottish Life consultant.

Retirement, Partner Events