Course on workplace pensions  

A roadmap to retirement

This article is part of
Guide to workplace benefits

A roadmap to retirement
(Photo: Pixabay/Pexels)

Independent financial advisers can help their clients cope with the current economic crisis by creating a personalised roadmap to financial freedom in retirement. 

This is the view of Romi Savova, chief executive officer at PensionBee, who warns that the cost of living crisis and rising inflation are making it difficult to create a long-term plan for later life.

But she adds that a good adviser can help clients by urging them to create clear retirement goals. 

Article continues after advert

Savova says: “Uncertainty can make long-term financial planning very difficult, but financial advisers may help their clients by setting clear goals and outlining the method to get there.

"By having an actionable plan, many savers may feel more confident and engaged in their savings, meaning they are more likely to commit to keeping up with regular pension contributions to boost their retirement fund.”

She adds that a good financial planner can reassure clients to avoid a knee-jerk reaction to move their pension savings into a very low-risk investment strategy, which would mean they miss out in the long run. 

She says: “The current economic environment has made setting the right investment strategy even more pertinent, regardless of whether markets are up or down.

"An adviser can be greatly beneficial in this area, helping review their client’s investment portfolio to ensure it is well diversified.

"Advisers can offer helpful recommendations to their clients such as avoiding the temptation of moving their pension to a very low-risk investment strategy while markets are low, as there is a good chance they will miss out on the eventual market recovery.

"They may also stress that low-risk plans should usually only be considered if a saver is withdrawing their entire pension imminently.”

Eduction is key

A similar notion is added by IFA Haresh Raghwani, who says the enormity of saving for retirement can be overwhelming. However, a good financial planner can focus clients to visualise what retirement may look like.

Raghwani, director and chartered financial planner at Berkshire-based Craufurd Hale, says: “Advisers can play an important part in helping clients plan their long-term savings by discussing the merits of pensions and other investments.

"Education plays a key and important part in helping clients understand the benefits. Products do not need to be discussed.

"Advisers can undertake cash flow modelling to help visualise to a client what their retirement may look like in the future. What do they need to do today to plan? Products do not need to be discussed at this stage. Advisers can provide reassurance and guidance.”

He adds that advisers can run educational seminars or workshops that provide informal generic information about the key merits of long-term planning. However, he insists it is important to educate younger people, who are traditionally left out as they are seen as unprofitable. 

He adds: “Typically, younger clients, are seen as unprofitable for many advisers, and I think this is the wrong approach to take. The education and guidance provided at a younger age will help clients in the long run.