Royal London has been named the most recommended and preferred pension provider by advisers, according to Defaqto’s pension-service review 2024.
Royal London not only retained its position as the most recommended pension provider in 2023 but also slightly increased its lead ahead of Aviva Life & Pensions in comparison to 2022.
Both businesses have the support of more than 35% of advisers.
Royal London also came top of the list for most preferred provider for the fourth consecutive year. It is a top three choice for 30% of advisers.
Aviva came in second again as a top three choice for 24% of advisers.
Meanwhile, Prudential improved its rank and moved into third place ahead of AJ Bell and Quilter.
The top 10 preferred providers, in order, were:
- Royal London
- Aviva Life & Pensions
- Quilter
- Prudential
- AJ Bell
- Transact
- Fidelity Adviser Solutions
- Aegon Retirement Choices (ARC)
- Abrdn (for Wrap)
- Abrdn Elevate
InvestAcc dominated the table for top performers, taking first or joint-first position in ‘product and proposition’, ‘new business servicing’, ‘pension freedom servicing’ and ‘existing business administration’.
Royal London once again fared well with four top-three rankings across the categories, ranking joint top for ‘provider strength and brand’.
Fundment placed first for the ‘online services’ category.
But Defaqto warned that the industry is “failing to meet advisers’ expectations” in five of the seven categories of service.
The firm also revealed personal pensions, Sipps and drawdown plans remained the most popular pension-product options.
However, in comparison to 2023, Defaqto noted there has been a renewed interest in other decumulation options, such as annuities and hybrid solutions.
Defaqto insight consultant Richard Hulbert said: “Service levels and adviser expectations are reflected in the decreased satisfaction scores in this year’s report.
“Industry satisfaction has dropped by an average of 8%, and as much as 11% in some categories.
“It’s concerning to see the lowest unweighted performance scores being received for ‘existing business administration’, which is ranked as the third most important category for advisers.
“It’s a sure sign that providers need to look at how they can improve this service area going forward.
“What is clear is that advisers are increasingly dissatisfied with pension providers across all measurements.
“Perhaps this is an indication that their propositions have not kept pace with the evolving regulatory environment. Whatever the reason, these numbers send a clear message that advisers expect better.”
Hulbert continued: “Economic and regulatory changes have resulted in significant shifts in the pension market over the last two years and the popularity of products being recommended by advisers.
“The number of products being recommended has jumped from 3.2 to 3.84 on average, or 3.6 if you discount workplace recommendations that have been newly added to the list this year.
“Decumulation has been a winner this year. Some 3% more advisers said they recommended drawdown and 25% more said they recommended annuities including conventional non-profit, enhanced, impaired products.
“The use of hybrid and blended solutions, a combination of annuity and drawdown, has also jumped by eight percentage points.
“This could be driven by economic factors linked to limited stock-market growth, stagnant dividend yields and high inflation.
“In addition, advisers have been under increased pressure from Consumer Duty and the FCA thematic review of retirement income, to justify their advice and prove their value.”
The annual survey conducted Defaqto measures how satisfied financial advisers are with their preferred providers and identifies where expectations are being met.
Source: https://www.moneymarketing.co.uk/news/royal-london-named-the-most-recommended-and-preferred-pension-provider/