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Three quarter of IFAs say clients’ priorities have changed

Three quarter of IFAs say clients’ priorities have changed
 

Almost three quarters (72 per cent) of financial advisers say their clients’ priorities have changed since the start of the year.

Research from Opinium, which carried out an online survey of 207 financial advisers earlier this month, found that among those IFAs whose clients have changed their financial focus, 73 per cent said their clients are taking more caution in their decisions.

In addition, 66 per cent are reviewing their finances more. 

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Discussing the findings, Justin King, chartered financial planner at MFP Wealth Management, said: “I always wonder how the current news affects a 30 year retirement plan. The world is continually valuing investments with all known information. The price today is the value that millions of participants place on those assets. 

“We can’t predict the future value of those assets. As always my advice is, create a plan, make investments that fit the plan, rebalance and reassess when the plan changes.”

The survey found that 37 per cent are investing less money at the moment and 29 per cent are saving more.

At the same time, a fifth (19 per cent) of IFAs said their clients are investing more and 23 per cent said they are saving less.

In addition to this, half (49 per cent) of IFAs said the war in Ukraine is their clients’ biggest concern for the next tax year.

Tom Kean, director at Thameside Financial Planning, said: “My impression is that it is business as usual and that clients are just getting on with things, with Ukraine just another regrettable headwind. Most are keen to understand that they are not invested in anything Russian, as indeed they are not.”

He said he has been avoiding the area for many years due to the various issues now coming to pass.

“Right this minute we are all guns blazing dealing with end of tax year investing. Interestingly, the most common theme for us is the usual scramble to pay into pensions and ISAs, particularly for higher earners, because they are impacted by the tapered annual allowance and the dwindling ability to use carry forward.”

Kean added: “When this runs out for higher earners, as it is already doing, more and more will be forced to retire or seek investments elsewhere, and dare I say, to more esoteric and risky ‘opportunities'.”

He described the tapered annual allowance as “a very real threat” and a risk to investors desperate to avoid penal pension tax. 

“I think it is a predictable flow of money into riskier areas and the regulator should view this as such. They need to be held accountable for this increase in risk, as it will begin to bite more and more. High earners are now limited to just £4,000 pension input, which is derisory, pernicious and unfair to people who already shoulder a massive burden in tax.”

The research also found that three in 10 IFAs (28 per cent) said their clients are most concerned about the rising cost of living, and for 13 per cent inflation is the main worry.