“The number of people that have amassed retirement savings is going to exponentially increase, individual's wealth sizes are going to be pretty broad as well. So you've got a whole cohort that are coming up with DC savings, how do you best serve their needs and support them through retirement? As I say traditionally in the UK, that would have been done through an adviser. There isn't necessarily the capacity in the adviser market to meet that demand, or indeed the processes in place.”
Hollingworth thought it inevitably started with the master trusts, who were “actively developing” solutions to deliver that.
“The master trusts will want to retain the wealthy customer as well. I call it the fight for the affluent customer who has been in a workplace solution and who can win the hearts and minds of the consumer.
“Can the provider of the master trust build up a good enough relationship with them to be trusted enough to then retain the savings, or does the IFA who's been very adept at providing that kind of service to those individuals in the past, still win? It’s going to be really interesting to see how it shapes up,” he highlighted.
Hollingworth shared how Franklin Templeton has been looking to develop a solution to help advisers with their retirement proposition.
He said: “What struck us is there's traditionally a disconnect between the cash flow plan and the underlying investment solution. What if you designed the investment solution so its objective is to deliver the cash flow plan, which means actually setting out specific cash driven targets that the investment is set to hit over the course of someone's retirement. So the two work in harmony, rather than there being a disconnect.”
In the US on the advice side, Ahmed laid out how Franklin Templeton was focusing on democratising it through the workplace.
“If you're just thinking about that 10 per cent of US households who are attracted to the wealth management industry, there's 90 per cent who might be in the middle. Or they just need basic advice on Social Security claiming, which is the entitlement program that we have in the US, which is government funded, but on average covers anywhere from a fifth to a third of your retirement income needs, unless you're a very low income maker.
“So it's important to provide advice on even the claiming strategy, because if you claim at the wrong time or in the wrong way, that could vastly impact your retirement income stream. So we're very focused on providing advice through the workplace,” he explained.
