2 in 3 advisers believe Brexit & DB transfer rush will boost drawdown

Its study found that 65% of advisers believe the guaranteed drawdown market will benefit from the ongoing Brexit process as retirement savers look for solutions which can help combat investment uncertainty.

Advisers also highlight opportunities from the growing defined benefit transfer market as savers cashing in on rising transfer values for switching to defined contribution funds seek safer homes for some or all of their funds.

The MetLife research found 50% of advisers believe growth in the guaranteed drawdown market will accelerate over the next two years with the launch of new solutions from providers enhancing growth.

The research – conducted as part of MetLife’s Quarterly Market Review being distributed to advisers – found 53% of advisers say they now feel obliged to offer guaranteed drawdown solutions to clients looking for investment security and 70% of advisers think that guaranteed drawdown products offer a lower-risk alternative than conventional drawdown or annuities.

Richard Evans, Intermediary Development Manager at MetLife UK said:

“Retirement conversations need to change to include a wider range of options and  the need for guaranteed drawdown is increasingly playing a central part in this discussion.

“Advisers clearly see guaranteed drawdown as offering security against a range of perceived threats, including Brexit, and as a method of hedging against taking too much risk for those transferring out of DB schemes.”

The role that guaranteed retirement income levels can play in encouraging people to save more is also highlighted by the research, with 52% of advisers believing that the presence of more guaranteed income solutions would encourage consumers to save more for their retirement.