Personal PensionDec 18 2015

Pension freedom sees 300% spike in client reviews

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Pension freedom sees 300% spike in client reviews

Data from software provider Selectapension has revealed the volume of cases advisers have processed has climbed by 302 per cent since November 2014.

Findings from the firm’s Asset Reviewer tool suggest as a result of this year’s pension reforms, advisers have been undertaking more analysis of their clients existing investments to ensure their positioning is suitable for their attitude to risk.

Review activity climbed immediately by 44 per cent after the reforms came into effect in April, according to its data.

Selectapension also found that the reforms have triggered an increase in the average age of clients whose assets are being proactively reviewed.

More than half - 53 per cent of clients - who have had their portfolios analysed are aged more than 60-years-old, up from just over a third - 34 per cent - in November 2014.

The most recent data also showed that bonds and property are the most favoured asset class choices among advisers.

Andy McCabe, managing director of Selectapension, said 2015 was a defining year for the pensions industry and April’s reforms acted as a catalyst for adviser activity, adding regulation has not stood still and even more change is on the way.

“The introduction of the secondary annuity market in April 2017 will benefit advisers as an increased number of consumers seek regulated advice and understand their new found options.

“However, with this comes an increased workload and complexity of cases as retirees react to new options again.”

Robert Lewis, director of Heritage Financial Solutions, said his firm had not seen an increase in reviews, having already meet with clients every six months, so this process happens frequently already.

“However, we have seen a sharp increase in the number of new clients looking for us to review their assets (at a risk, taxation and performance level), in particular their pension assets.

“They seem to be keen for us to provide forward cash flow modelling, we think this is linked to the pensions freedoms and the fact that clients are now starting to understand that they have more flexibility in the way in which they take their pension benefits.”