So, to address the retirement gap issues, L&G has started holding advice breakfast sessions where it shares customer research and explains the challenges customers are facing in retirement.
The company is also doing work to demonstrate the value of annuities versus drawdown.
“Let’s assume we get 4 per cent on drawdown, what happens if there is a market shock and how does that change things for people?” Ms Byron said. "What happened to people who went into drawdown five years ago? Are they likely to run out of money?
“How does the new world of retirement work and how can we help you position annuities with your consumers with messages that will resonate with them?” This does not mean L&G is saying that annuities are always the right answer, Ms Byron is keen to stress.
“Equally, drawdown is not always the right answer for people,” she added. “Drawdown may be the right answer when you are 65, but for that same individual do they want to be in drawdown at 80? We have concerns around cognitive decline as people age. When a customer is in their eighties or nineties or when they start suffering from dementia, do you want to be advising them on a drawdown product? Probably not.
“It is not a one-product silver bullet solution. It is much more about the engagement of customers.”
Ms Byron added, instead of pushing the product first, providers need to look at an individual’s basic needs and then work out the best product that can help them.
L&G is also considering a robo-advice offering, which Ms Bryon said will not replace advisers they do business with. Rather, it will complement what they do and help them with the messaging they are giving.
The company has also made improvements to its underwriting capability and pricing, to make sure more customers qualify for enhanced uplifts, while it is expanding its distribution team.
Ima Jackson-Obot is features writer at Financial Adviser
