Has demand for advice increased?
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Almost half (47%) of financial advisers said demand for retirement advice has increased more than usual due to the pandemic, up from 40% who said so in the previous year, and even more advisers have seen an increase in the number of clients looking to retire early.
Echoing labour market data that shows older workers are leaving the job market, a new report by provider Aegon and research consultancy NextWealth shows that demand for advice to retire has gone up. Advisers say changing attitudes to work are driving demand as clients reassess their priorities in life. Just over half (51%) of advisers said there has been an increase in clients retiring early.
People re-evaluate priorities during pandemic
Whether these findings will translate into an increase in the proportion of all people at retirement who take regulated advice is not clear as yet. In 2020/21, the Financial Conduct Authority found that 33% of pension plans accessed for the first time were accessed after regulated advice, down 3% from the previous year.
Heather Hopkins, managing director of NextWealth, said the Covid pandemic has fuelled demand for retirement planning advice as people re-evaluate priorities and look at options to retire early.
“Half of financial advisers told us that they have seen an increase in the number of clients looking to retire early through the pandemic. The complexity of this decision underscores the value of professional financial advice,” she said.
The research also shows a trend among clients towards full retirement, representing a shift, but people are increasingly concerned about running out of money before they die - 61% of advice clients have less than £250,000 of pension assets, down from 67% in 2020.
How are advisers adapting to regulatory changes?
On the advice landscape, the survey confirmed what pension professionals already know: a sharp reduction in firms providing defined benefit transfer advice. Less than one quarter of advisers now offer a DB transfer service, down from 56% in 2018. Just over 10% of advisers who do not offer DB transfer advice themselves use an informal referral to another adviser. When it comes to abridged advice, nearly 60% of adviser firms providing DB transfer advice make use of it, up from just over 50% last year.
Elsewhere, the adviser community seems to feel broadly neutral about the Financial Conduct Authority’s suggestions that it could introduce personalised guidance, with 41% saying they have an open mind.
However, a considerable minority (19%) believe the proposal contain a significant risk of consumer detriment. Just over one in 10 advisers (12%) said they would want their firm to explore it for some client segments, while a similar proportion (11%) said their firm was unlikely to offer it - and 8% said they see no need for personalised guidance.
