Four out of five adviser firms expect the new pension freedoms to provide a significant boost to business, according to a survey of Intelliflo’s Intelligent Office users, despite the Financial Conduct Authority stating it is unsure how much advisers will benefit from the new freedoms.
Carried out during February and March, with a sample size of 176, the poll found that 55 per cent believe it will stimulate an upturn of between 5 and 20 per cent, while almost 18 per cent predict a business uplift of between 20 and 50 per cent.
Based on adviser data published by the Association of Professional Financial Advisers for 2013, Intelliflo estimates that a 20 per cent increase in business would equate to around £765m of additional revenue across all UK advisers.
The software provider’s previous survey in November last year showed almost three quarters of respondents believed that many or some of their clients would be interested in taking all their money out of pensions, with more than a quarter saying it will be of interest to many.
At the time, 40 per cent reported they had already experienced increased business for their firm as a direct result of the government’s proposed new pension rules.
In November last year, the FCA revealed that advisers will only pay 12 per cent towards the guidance guarantee, while deposit acceptors, life insurers, portfolio managers, and managers of collective investment schemes or pension schemes will all pay 22 per cent each.
The regulator said at the time, an equal allocation across the four product provider fee blocks is a “reasonable starting position”, adding the discount to advisers is being given as firms will only benefit if consumers go on to seek financial advice.
Nick Eatock, Intelliflo’s executive chairman, commented that the latest results show optimism in the adviser community.
“However, just a few months ago we found that many are also concerned that some of their clients may not be able to resist the opportunity to dip into their pension savings, leaving them with reduced funds to provide adequate investment to fund later life.
“It’s going to be interesting to see how advisers and their clients rise to the challenges that the new rules will inevitably present.”