More than half (67 per cent) of advisers said people living longer was the main reason for more people now seeking retirement advice, according to research by NextWealth.
In its report Managing Lifetime Wealth: Navigating Retirement Advice, sponsored by Aegon, advisers said increasing demand for retirement advice was largely down to the ageing population and medical advances.
This ties in with Aegon’s Second 50 report which highlights how valuable advice can be when navigating the many variables in life after 50.
Steven Cameron, pensions director at Aegon, said: “Once again, this year’s report from NextWealth highlights the importance and vibrancy of the retirement advice market, with many factors contributing to healthy demand.
“The most significant driver of demand for retirement advice is the ageing population and medical advances.”
Additionally, the ongoing cost-of-living crisis, alongside higher interest rates and volatile markets, also continued to impact demand, with 58 per cent of advisers citing that the impact of the economic environment will prompt clients to seek financial advice.
This was followed by current pensions and tax rules and allowances, including the abolition of the lifetime allowance and increases in annual allowance rules.
Just under half (49 per cent) of advisers saw increased demand from clients affected.
The report also revealed that affordability topped the list of factors suppressing demand (19 per cent).
Cameron said amid this positive surge, concerns linger as affordability remains a barrier to retirement advice, with a growing “advice gap”.
The Financial Conduct Authority and Treasury are currently consulting on the advice guidance boundary review, offering an opportunity to explore simplified advice solutions and targeted support for those currently priced out of receiving help.
"Advisers are also aware that negative headlines and regulatory change such the FCA consumer duty could depress demand,” Cameron said.
“While the consumer duty may be adding new considerations to the provision of advice, we hope that longer term it will further improve confidence amongst consumers that the advice they are receiving is of consistently good value.”
Heather Hopkins, managing director of NextWealth, said the research evidenced that retirement advice remains “a cornerstone of financial planning”.
“It helps clients achieve peace of mind and financial security and is a critical component to the business of financial planning,” she said.
“While demand for retirement advice remains strong, there are challenges on the horizon.
“Concerns about the affordability of financial advice for those who need it most weigh on the minds of many advisers.”
Hopkins said negative publicity further clouds the landscape, and the changing regulatory environment adds complexity and cost.
She explained this report is a reminder that financial planning is about addressing the “very real concerns and aspirations of clients”.
sonia.rach@ft.com
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