The majority of adviser platforms believe the ability to consolidate and transfer pensions will be the most important feature when pensions dashboards are implemented next year, a study by NextWealth and Bravura Solutions found.
The firms surveyed 11 adviser platforms about their plans for connecting to the pensions dashboards ecosystem, as well as uncovering the opportunities it presents to the industry when it is available to consumers in 2024.
There were a host of features which platforms are interested in implementing once pensions dashboards are fully live, with transfers and consolidation ranked as the most popular. Several respondents believed this could be a crucial way to help individuals reduce the overall cost of their pension fund management, as well as increase the scope of investment types available to them.
But the Financial Conduct Authority (FCA) recently confirmed in its consultation paper it is looking to limit the ability to consolidate to better protect consumers.
The other features identified by platforms included retirement planning tools (second), financial education (third), an at retirement service (fourth) and the ability to offer robo advice (fifth) – highlighting the need to close the current advice gap given the amount of individuals expected to engage with dashboards when launched.
Interestingly, despite the majority of platforms believing dashboards will be of value to both consumers and advisers, particularly with Consumer Duty regulation expected later this year, only one platform surveyed stated it was planning to build its own commercial dashboard front-end, which was expected to cost between £1m-2m ($2.46m, €2.3m).
The majority (six) had no plans to build a commercial dashboard, with the remainder still undecided or preferring not to say (four).
Jonathan Hawkins, principal consultant and pensions specialist at Bravura, said: “The Pensions Dashboards Programme (PDP) is entering a critical year this year. As an industry, we need to start challenging ourselves to think beyond implementation to focus on the sizable amount of benefits and features we can introduce to help make advisers’ lives easier and empower consumers to make the right decisions.
“We’re already talking with clients about the exciting possibilities microservices and digital apps can bring to the pensions dashboards ecosystem, and our in heritage the Australian market makes us well placed to help clients reimagine the UK’s pensions sector and create a competitive edge.
“It was surprising to see that transfers and consolidation ranked so highly, given the lack of platforms currently planning to build their own dashboard for clients. While the research is only designed to offer a snapshot of current thinking, it points to the fact that a large number of platforms are not looking to manage the transfer or consolidation journey.
“I think it is highly likely that this will change as platforms and providers start to work through the programme and big-ticket projects like data cleansing come to a close.”
Heather Hopkins, managing director of NextWealth, added: “The pensions dashboard offers a fantastic opportunity for advisers to engage with clients and having tech in place that makes this easy for both parties is the holy grail.”
The platforms surveyed were:
- Abrdn Elevate;
- Aegon ARC & Aegon Platform;
- AJ Bell;
- Fidelity International;
- Fusion Wealth;
- Morningstar Wealth Platform;
- Parmenion Capital Partners;
- Quilter; and