The government’s proposed changes to pension legislation has created a massive demand for financial advice, Jamie Smith-Thompson has claimed.
The owner of Kent-based Portal Finance said the Budget in March had significantly raised awareness and alerted people that there were numerous alternatives to annuities.
Describing chancellor George Osborne’s speech as an “educational process”, Mr Smith-Thompson said that whereas previously most people would get an annuity without advice, now financial advisers were being approached to guide those approaching retirement on the full range of options available.
He said: “There has been more demand for advice since the Budget. Pre-Budget our biggest competitor was the likes of Hargreaves Lansdown, which does not offer any advice and would function as a quotation broker. There was no real offer of any advice or alternatives.
“The Budget, for us, has worked as an educational process and our clients now know there are other things out there.”
Mr Smith-Thompson said in the past, just 20 per cent of Portal Finance’s at-retirement leads wanted advice, with the rest only interested in getting basic quotes.
But now he said 80 per cent of the firm’s leads were actively looking for advice on the “multitude of options” in the marketplace.
But despite encouraging his peers to seek out opportunities in the at-retirement market, he warned them not to assume everyone was aware of the wealth of options available.
While awareness of pension options may have increased since the Budget, Mr Smith-Thompson urged financial advisers not to assume clients knew everything and to be clear when addressing the potential drawbacks to income drawdown.
Adviser comment
Minesh Patel, director of London-based EA Financial Solutions, said: “The changes from the Budget and, in particular, the ability for retirees to withdraw unlimited amounts from their pension funds is a welcome and much needed boost to the popularity of pensions.”
Neil Sadler, chartered financial planner at London-based LIFT-Financial, said:”I doubt that the average person has given much thought to what they will do at retirement if they do not buy an annuity meaning the need for advice will certainly grow, as will the design of products and methods relating to taking income in other ways.”
