A new white paper from Triple Point argues that longer retirements, changing tax rules and the transfer of wealth between generations are influencing both client needs and adviser business models.
Financial advisers may need to adapt their propositions as demographic shifts, regulatory developments and changing client priorities reshape the advice market, according to a new white paper from Triple Point.
The firm’s paper, ‘From accumulation to legacy: transformation of the financial advice market’, explores how retirement planning, estate planning and client retention are becoming increasingly interconnected.
The report points to longer life expectancy, evolving tax policy and the transfer of wealth between generations as factors influencing future demand for advice.
One area highlighted is the continued shift from wealth accumulation towards retirement income planning.
As defined benefit pensions become less common, the paper notes that more retirees are relying on drawdown and other income solutions, increasing the importance of retirement planning that can support clients over longer periods.
The report also focuses on the scale of intergenerational wealth transfer expected over the coming decades. According to the paper, around £2.6 trillion is expected to be inherited in the UK by the late 2040s, with total wealth transfer estimated to reach £5.5 trillion when lifetime gifts and other forms of wealth transfer are included.
The paper suggests this creates a need to engage wider family members before wealth changes hands. It highlights research showing that 76% of advisers believe building long-term family relationships is the most effective way to retain assets as wealth transfers between generations.
Consumer Duty is another theme running through the report. Triple Point argues that as clients’ circumstances evolve through retirement and later life, firms will need to consider how changes in regulation, taxation and personal objectives affect outcomes over time.
The paper also examines the potential implications of forthcoming inheritance tax changes affecting pensions, alongside increasing demand for retirement income planning as people spend longer in retirement.
Rosalind Hudson, retail strategy director at Triple Point, said: “The pace of change in financial advice is accelerating, driven by regulatory change, ongoing demographic developments, growing income demands and rising wealth transfers. Advisers need to consider how these changes are reshaping their clients’ needs and the future of their businesses.”
She added: “Advice firms now have a window to decide whether they simply respond to these forces or use them to reshape their proposition for the next generation of clients. The opportunity is significant, but it will belong to firms prepared to move first.”
The report concludes that advice firms should consider how they support clients throughout the full planning journey, from retirement income needs to wealth transfer, while ensuring services remain relevant to future generations of clients.
Main image: whitepaper, beatriz-perez-moya-XN4T2PVUUgk-unsplash
