Advice firm Tideway has seen a third of clients put their approved pension transfers on hold due to Brexit, its managing director has said.
James Baxter told FTAdviser that some clients who received a positive recommendation to transfer out of their defined benefit scheme in the last couple of months were “sitting back and waiting to see what happens”.
He said: “It is perfectly reasonable for them to say 'you know what, I like the idea of transferring, but I'm going to wait to see what happens in October and I'll come back in November'.
“I think that is a perfectly reasonable consumer response to what is going on in the world. We are all worried, but we don't really know what we're worrying about.”
There has been a lot of political uncertainty around the UK’s looming departure from the EU, with prime minister Boris Johnson pledging to leave the bloc by October 31 “with or without a deal”.
And Mr Baxter said worries about Brexit were a more common concern in pensions advice than in other areas.
He said: “In terms of people holding back from investments, it's pretty small, it's less than 1 per cent. People holding back from doing transfers – that is about a third of our caseload.
“For those who have offers [cash equivalent transfer values] which aren't due to expire until November, why would they submit now instead of November.”
Tideway, which has handled more than 1,600 pension transfers since April 2015, when pension freedoms where introduced, works on a contingent charging structure of 1 per cent – but will introduce abridged advice and a flat fee if the rules proposed by the Financial Conduct Authority in this area come into force.
“I don't think we are going to be submitting a lot of cases in October,” Mr Baxter concluded.
Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, noted no one knows what will happen to the markets over the short term and Brexit was no exception.
He said: “Everyone thought that a leave vote in the referendum would result in markets going down, but they actually soared. All we know is that over the long term the general trend has been up.”
Mr Carlson warned, however, that “staying in cash for short periods of time is a one-way short-term bet that markets will go down, which is very dangerous”.
He added: “My clients are invested for the long term and are told to expect the markets to go down at some point - that's the only guarantee I can give them.
“Their portfolios and financial plans are stress-tested for market drops as they could happen at any time with little or no warning.”
Rebecca Aldridge, managing director of Balance Wealth Planning, said it was natural to be cautious “when it feels like there is uncertainty ahead”.
She said: “Even though most advisers would say that’s best to invest straight away rather than try and time the market, the reality is that some people instinctively feel uncomfortable about doing that.