Advisers and paraplanners are facing significant operational strain due to regulatory changes, according to a new report from Scottish Widows.
More than three quarters (78%) of advisers say recent regulatory and tax policy changes have had a negative impact on the cost of doing business, while 85% have seen their workloads negatively impacted. More than a third (39%) also report that these pressures have had a negative impact on their mental health.
Meanwhile, 94% of paraplanners said their workloads are rising and 85% say that frequent changes to tax policy and allowances are increasingly affecting their business processes.
One of the biggest challenges facing advice firms is the complexity of IHT changes, the report shows. Only half (52%) of advisers say they feel ready for the changes in 2027.
Asked about their clients’ main challenges, three quarters (74%) include complex tax rules. Drilling into the strategies to mitigate these changes, a range of options are being used including lifetime gifting (55%), reviewing retirement income/spend (51%), earlier drawdown of pension assets (49%) as well as earlier family conversations (48%) and the use of trusts and onshore bonds (37%).
The global environment is also having an impact on advisers’ interactions with clients. Nearly two fifths (37%) say that UK domestic political changes have seen them change the advice or recommendations given to a client, with the same experience reported for Trump’s tariffs (34%) and global trade disputes (22%).
Almost two thirds (62%) of advisers expect more geopolitical disruption, while more than half (54%) expect higher volatility and 32% predict higher inflation over the next five years. In addition, the fear of a sustained downturn or recession is a concern for 11% of advisers.
Despite this, almost nine in 10 (88%) advisers expect a rise in returns over the next decade, with an upward trend in equities.
According to Scottish Widows, UK investors are also signalling a strong intent to invest. Almost three quarters (74%) of advised investors plan to increase contributions over the next year, compared to 50% of non-advised investors.
Nearly half of investors said they had increased the amount they invested over the past 12 months, with the average amount invested sitting at £20,868. Contributions were notably higher among those aged over 55 and men. Nearly two thirds (62%) plan to increase investing over the next year, while only 8% expect to decrease the amount they invest.
Among those increasing their investment contributions, long-term planning was a core motivation (67%), while 47% are driven by an expectation of returns.
Jenny Davidson, intermediary wealth director at Scottish Widows, said: “Advisers anticipate a challenging run to 2030. Heightened international tensions, the potential of further trade tariffs and persistently sticky inflation are causing unease across markets. Advisers face a delicate balance of keeping their existing clients’ financial plans on track while navigating a shifting and challenging business environment.
“Stability is key – both for advisers and their clients – particularly in periods of sustained uncertainty. That means having the right tools and support in place to help advisers respond to market pressures, adapt to change and maintain confidence in the plans they set for clients. In an environment like this, consistency and reliability become just as important as performance – helping advisers keep clients focused on their long-term goals.”
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