Findings from the latest UK Adviser Pensions and Product Report from Investment Trends underscore the critical value of retirement advice, with 79% of advisers considering it a key service they offer to clients, yet also, has highlighted difficulties some advisers have in aligning their service with the shifting requirements of pre-retirees and retirees.
Furthermore, the data reveals a significant shift in the advisers’ perspective, with nearly half (47%) now recognising their essential role in maintaining client investments during market volatility—a notable increase from 35% last year.
Yet the report has also identified a key segment of pension advisers grappling to align with the shifting requirements of pre-retirees and retirees, despite the crucial role of retirement guidance in their service offering. “We’re observing that a small, yet significant fraction of off-platform pension advisers are struggling to maintain confidence in their ability to meet evolving client needs,” noted Lorenzo Vignati, associate research director at Investment Trends. This concern is compounded by advisers reporting a decrease in their self-rated expertise in advising pre-retirees and retirees.
The report also highlights that annuities have seen a pronounced increase in allocations, with advisers citing a 38% allocation to annuity or guaranteed products, up from 27% in the previous year. “The landscape is clearly shifting, with growing demand for income guaranteed products,” explained Vignati. “However, advisers express concerns about the inflexibility of these products, which can be a hurdle to recommending them.”
In terms of the recently implemented Consumer Duty regulations, advisers communicate this has introduced a significant compliance burden, disrupting the operational efficiency of their practices. The research highlights the industry’s call for enhanced support to facilitate ‘fair value’ assessments. “The increased administration and compliance demands are undeniable, with advisers seeking platform support to navigate these changes,” said Vignati.
The report concludes that, as the UK pension advisory sector faces these multi-faceted challenges, the industry must adapt and evolve to maintain service quality and regulatory compliance. “The report findings clearly illustrate the need for proactive measures to support advisers through these transitions, ensuring the sustainability of retirement guidance and the incorporation of desired financial products,” added Vignati.
