Advisers have faced a challenging end to the tax year on April 5, following the Covid-19 pandemic, which has caused uncertainty and led to a different working approach.
Ian Lowes, managing director of Lowes Financial Management told FTAdviser that work throughout this period was “more challenging than usual”.
“Obviously the pandemic is still having an impact on every part of life. In terms of processing, we are having to allow more time because we are working from home – this includes providers and platforms – not just us,” he said.
The tax year which ended on April 5 usually creates a multitude of work for advisers with pension and Isa allowances being a focus of clients' concerns.
In March this year, self-invested personal pension provider Curtis Banks called for the government to extend any end of tax year deadlines after receiving calls from worried advisers.
However, no extension was offered, despite differing working conditions and a greater variance in the type enquiries for advisers.
“It was anticipated that there would be a significant hike [in the Budget] in capital gains tax but that hasn’t occurred, and there was no change in the pension tax relief either,” Lowes said.
At that time, investors breathed a sigh of relief as a predicted hike in capital gains tax did not materialise in the Budget.
Chancellor Rishi Sunak had been predicted to raise the 20 per cent rate to bring it more in line with income tax rates, but while both the CGT annual exemption and the IHT thresholds were frozen until 2026, no further action was taken on either.
Lowes added that Easter came at an awkward time of year for many, which “caught people out” but with a “brilliantly benign budget” some of the pressure was off advisers, he said.
Darren Dicks, head of wealth management at Age Partnership, said the Covid-19 pandemic had meant another “hard year” following on from the Brexit uncertainty faced in the tax year from 2018-19, with many clients deferring their pensions.
“Clients who would previously have chosen to retire earlier than state pension age have been deferring, mainly due to economic uncertainties but furlough has also played a part. Why would clients choose to retire when they’re currently on furlough!”
Dicks added the lack of opportunity and choice to go on holiday, see friends and family as another large factor in clients’ decisions to defer.
Despite tough conditions for advisers, Dicks noted there had been a marked change at Age Partnership since February when the vaccination programme kicked off.
“Clients are now much more optimistic about their future and feel more in control of making big financial decisions about their retirement,” he said.
Stephanie Pickering, independent financial adviser at Verity Wealth Management, told FTAdviser that the end of this tax year had been much busier for several reasons.
Pickering said: “Normally the end of the tax year is quite relaxed for us as we have generally already completed any necessary Bed and Isa, capital gains tax and pension funding exercises with plenty time to spare.
“The end of the tax year this year has been much busier for us, as people are wanting to make last minute pension or investment contributions, including a couple of new clients, as they appear to have more money due to spending very little in the last 12 months when in lockdown.”
Pickering added current issues that Verity Wealth Management was facing were poor service levels being provided by the companies, with large companies still attributing poor service to Covid-19 restrictions which was “totally unacceptable”.
“We are often waiting 40 minutes in a queue to speak to someone, then when you do get through, those answering phones have to call someone else more often than enough as they cannot answer your query, this often results in us being on the phone 60 minutes plus which is a complete waste of our time.
“IFA practices are still providing exceptional service to their clients even though the service we receive from providers is somewhat lacking. We feel sorry for some of the sales and broker consultants trying to attract new business when the existing business is letting their company down.”
Amanda Barnett, independent financial adviser at Grosvenor Consultancy, said it was “hard to look beyond lockdown and Covid-19" and that she was looking forward to the end of this period.
“The end of year rush is busy, no doubt. But I think it serves a purpose. Throughout the year, we strongly encourage our clients to plan and avoid the end of year rush. We work hard to help make this happen. However, we’re all human. Life is busy and it’s natural for one to be distracted. A deadline forces action, at least.
“We are fortunate to work in an adaptable industry, backed by strong IT. Clients have adapted to a new, more remote relationship. Providers have had to adapt too and have been innovative in doing so. We are still busy as a result.”
Ruth Gillbe is a freelance reporter for FTAdviser
