Advisers See Pension Freedom Changes As Biggest Development Opportunity

by | Feb 17, 2016

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The vast majority of financial advisers (90%) see the UK pension freedom changes as their single biggest business development opportunity.

This is the conclusion of a new survey conducted by Vanguard Asset Management on the opportunities and challenges ahead for UK financial advisers.

What’s more, 94% of advisers cite helping clients achieve their life-time goals as the most important aspect within the client and adviser relationship. Also, two in three UK financial advisers (68%) state that clients come to them specifically to address retirement income planning.

As for the challenges ahead, the survey revealed the top challenges for UK financial advisers in the year ahead were regulation (31%); client acquisition and retention (18%); and, managing client expectations (16%).

 Theme Greatest Challenge
Regulation 31%
Client acquisition and retention 18%
Managing client expectations 16%
Defining your value proposition to clients 15%
Increasing fiduciary responsibilities 9%
Market volatility 7%
Keeping up to date with new Products 3%
Keeping up to date with education 1%

Figure 1. Greatest challenges facing UK financial advisers, Vanguard

Head of UK Retail Sales for Vanguard Neil Cowell said: “The pension freedom changes have raised a number of questions for UK consumers on how to spend and invest their lifetime savings. However, an even bigger challenge is to ensure people save sufficiently for retirement by encouraging them to develop a financial plan with clear goals.

“Our survey shows that financial advisers face great challenges ahead, but also tremendous opportunities. Vanguard is a strong believer in the value of advice and financial advisers, and we have been helping advisers to tell their story for many years. Most recently, we’ve published research that seeks to quantify the difference between the returns an investor might achieve with an adviser’s help and the return that they might have achieved if left to their own devices.

“This difference, which we call Adviser’s Alpha, is roughly 3% per annum over the long term and comprises seven different components, including asset allocation, behavioural coaching and other relationship-oriented services. These elements create real value for clients.”

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