The report analysed 16 platforms, which are generally offered by insurance companies, asset managers and large-scale financial advice firms, and found that they are still mostly unable to help people access and manage their income in retirement.
According to the study, this failure to aid retired customers can be attributed to their very slow progress in adapting to customers’ needs, and a lack of innovation across the industry.
Customers are restricted
The Lang Cat said that providers are not giving clients enough flexibility.
Just eight out of the 16 platforms analysed, for example, allowed their customers to make withdrawals on a day they chose, restricting clients to taking their income according to what suited the provider and not the customer.
Although this has shown a small improvement since in 2017 when only six out of 14 platforms allowed flexible customer withdrawals.
Additionally, only three of the providers offered pre-funding on income withdrawals. This means that it could take over a week for clients to access their funds via platforms that do not provide this service.
In the previous report there were four providers offering pre-funding services.
Not tax wrapper friendly
The study also examined the way people nowadays take advantage of different tax incentives and how platforms are not up to date with their clients’ financial needs.
Only four out of the 16 providers offer consolidated income payments across all tax wrappers – whether they are Isas or drawdown accounts.
“Without a means to deliver a single combined payment, clients could have multiple sums landing in their bank account on different dates, making it harder to keep track of their day-to-day finances,” the report said.
However, the number increased from the two platforms providing this service in 2017.
‘Computer says no’
Alistair Wilson, Zurich’s head of retail platform strategy, said: “The platform market has made some progress in helping advisers and customers manage money in retirement, but vast differences remain in capability between providers.
“In many instances, it’s still a case of ‘computer says no’.
“A lack of a market-wide understanding of how to handle cash – including infrequent or inflexible payment options – is restricting choice and convenience for consumers.
“But with customer expectations on the up, the days of providers expecting people to fit in with their processes are numbered. With many investors on track to spend more years on a platform in retirement than accumulation, providers have got to get quicker and slicker at giving people their money back.”