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Irish Pensions Magazine Autumn 2013
T
here is no denying that our population is aging.
With the CSO predicting that the number of people
over the age of 60 will grow from 750,000 in 2011 to
reach 1 million in less than ten years, provisions must
be put in place. In an effort to allow financial advisers
to be in a position to provide for this growing market,
LIA has launched its new Retirement Planning Adviser
course and RPA designation.
The Professional Diploma in Retirement Planning
Advice is a brand new five-module course which
focuses on the knowledge and competencies required
to provide expert financial advice to consumers on their
retirement planning needs, taking retirement benefits
in an optimal manner, and investing post retirement,
e.g. in ARFs.
This new course and qualification (awarded by
UCD and at Level 7 on the National Framework of
Qualifications), is designed to equip financial advisers
to service the growing ‘grey’ market, seen as the next
big opportunity for advisers in Financial Services. With
tax relief nowmore limited, it is expected that retirement
planning will move away from its current narrow focus
on wealth accumulation and management, and turn
back to the basics of helping individuals to have a
decent standard of living in retirement.
Since the initial launch of the Professional Diploma
in Retirement Planning Advice, a number of pensions
intermediaries have embraced the RPA designation
and have made a move to make the course mandatory
for their retirement planning advisors and support staff.
In addition to the CSO’s predictions for a sharp
increase in the number of individuals approaching
retirement in the coming decade, there are a number
of other factors which will contribute to the growth of
the Retirement Planning market:
The Demise of Defined Benefit (DB) Schemes
As most DB schemes will not deliver the benefits
expected real advice is urgently needed. The numbers
of active members of funded DB pensions schemes,
excluding the non-funded public sector, is down 20,000
in the last two years to 200,000 (Source: Pensions
Board, April 2012).
Pension Fund Limits
The introduction of pension fund limits over the last few
years has had the downside of limiting the opportunity
for retirement funding. It has increased the confusion
for individuals at or close to the limits. “At what stage
do I cease funding?”
ARF v Annuity
It is all too easy to go for the ARF route, as individuals
like to see the large fund in their hands. However, have
we adequately explained to individuals the bomb-
out risk that they are taking on as life expectancy
continues to increase, and investment returns may be
lower than before?
Phased Retirement
As we live longer the cost of retirement is sky rocketing.
Individuals will cope with this in a number of ways
including phased retirement and later retirement.
The traditional way of picking a retirement date and
projecting the fund requirement to that date may no
longer be sufficient.
Limited Alternatives
Investment opportunities have now become more
limited. Diversification is the key, and with continued
tax efficiency available for pensions for the average
investor, pension vehicles can provide the best access
to that diversification.
RPA Course Information
TheRetirement PlanningAdviser course iscomprisedof
five modules, namely QFA Pensions, QFA Investment,
QFA Regulation, Retirement Planning Advice I, and
Retirement Planning Advice II. The course material
has a strong practical case-study approach, focused
on the retirement planning advice process in real life
situations, from fact-finding, to analysis of needs, to
provision of personal recommendations. Successful
candidates will receive the Professional Diploma in
Retirement Planning Advice from UCD (Level 7 on the
NFQ).
While those who hold the QFA, certain APA
New Retirement Planning Adviser (RPA) Course from LIA
by Willie Holmes
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