Adapt your business to address advice gap

Adapt your business to address advice gap

Q: How can I adapt to the different intergenerational needs of the UK market?

A: As patterns of wealth accumulation and decumulation have changed over the past decade, the three generations – Baby Boomers, Generation X and millennials – face different financial challenges.

The Financial Conduct Authority, tasked with ensuring the financial markets work well for all, is naturally concerned about an ever-widening advice gap and whether products will adapt to meet the evolving needs of consumers.

Smart advice businesses will be adapting their business models to take advantage of new opportunities in emerging generations in order to remain successful in the future.    

The industry will have to keep pace and innovate to ensure the availability of appropriate and flexible products and services to meet the changing needs of these generations.

Baby Boomers

This generation is considering how they can continue to maintain living standards as they retire.

Due to increased life expectancy, those retiring are likely to need more flexible access to credit in later life, enabling them to maintain their quality of life among escalating living and care costs. 

This may be achieved through greater innovation in the pension decumulation and equity release sectors.

Generation X

Clients in this generation are often financially stretched. Despite having higher than average incomes, many have low cash savings and high unsecured debt.

This generation would benefit from more innovation within the pension sector as they face long retirements due to increasing life expectancy.

Retirees are currently forced to choose between low, but guaranteed, annuity rates and the investment risks associated with the flexibility of drawdown arrangements, which make future income streams uncertain. Innovation needs to address this.


This generation faces difficulties in building wealth due to rising house prices, insecure employment, low interest rates and higher debt (including student debt).

Millennials would benefit from more innovative consumer credit products so that they can smooth spending in the very short term. 

Delivering fair outcomes for individuals is paramount, but commercial returns will need to be sufficiently attractive for credit providers.

Savvy advisers will be looking at their business models to consider how they can service these markets and take advantage of the opportunities as wealth filters down through the generations. This may be through traditional face-to-face advice, but younger generations are likely to require hybrid solutions that are flexible and accessible via different channels.  

Start with your target markets and define what advice, services and solutions the clients in these markets require, then create a proposition to meet these needs.

James Marshall is associate director of TCC