The overhaul of the pensions industry has generally been hailed as an opportunity for investors and consumers, who now no longer have to buy annuities when they reach retirement age.
Dubbed ‘pension freedoms’, it is widely felt the investor community will benefit the most from the reforms.
But what are the opportunities for advisers and advisory firms?
According to the results of the BlackRock Investor Pulse Adviser Survey that canvassed opinions from 250 financial advisers in the UK, 70 per cent believe their clients are concerned about outliving their savings in retirement, and 71 per cent of advisers think their clients are planning on working longer and retiring later.
All of which suggests that those who currently have an adviser will require their services until far later in life and those who do not currently use an adviser may well think they need one to plan properly for retirement.
Doug Ryan, a consultant at Mattioli Woods, observes that the changes will encourage people to “be more engaged with pensions”.
He says: “I think generally it’s an extremely positive pension legislation change for both advisers and the public, and it will resonate with the public, which can only enhance advisers’ roles in their clients’ lives.”
Jeremy Roberts, head of UK retail sales at BlackRock, believes the need for pre-, at- and post-retirement advice is an opportunity for UK advisers.
He explains: “The flexibility which the changes have brought is welcomed… by advisers. But I think that change brings uncertainty and uncertainty brings the need for people to seek help and seek further advice.
“So I think it is an opportunity for advisers because customers will need more advice. The flexibility is great but there are an enormous amount of options now and therefore the consumer will need help on which direction to go.”
In his conversations with advisers, Mr Roberts has found that the majority think the new pension freedoms are a blessing, not a curse.
But he cautions: “I think the important thing here is that, ‘Yes, flexibility is great on [the] one hand but it does come with a health warning’.
“Are they going to invest that wisely? Are they going to leave it in cash? Are they going to spend it?”
It seems advisers now have not only an opportunity, but a responsibility to educate their clients about what to do with their accessible pension pots.
So is the adviser industry prepared for the changes?
FundsNetwork’s Adviser Class of 2015 Survey, which had 209 respondents, suggests the majority of advisory firms are prepared for the reforms. Of those that were asked ahead of the introduction of the changes on April 6 this year, 94 per cent of firms stated they were either fully (32 per cent) or somewhat (62 per cent) prepared for the changes.
Jon Everill, head of advisory services at FundsNetwork, notes that while advisers are set up for the reforms, their clients are not.