The pandemic had a significant impact on demand for retirement planning advice.
That’s one of the conclusions of a new report from Aegon and Next Wealth, which also found that changing attitudes to work are driving demand for retirement advice.
Managing Lifetime Wealth: Retirement Planning in the UK aims to benchmark current practices and approaches to managing lifetime wealth while highlighting the most significant trends shaping the retirement advice profession.
While demand for retirement advice continues to increase as the pandemic rumbles on, it was more challenging for advisers to acquire new clients due to restrictions on social distancing, including face-to-face meetings.
The latest data illustrates a continued rising demand for retirement advice, with 47% of advisers taking part in the study reporting demand has increased, up from 40% a year earlier.
Advisers say that changing attitudes to work are driving demand as savers reassess their priorities in life.
More than half of advisers reported an increase in clients retiring early.
Also within the research was the finding that the pandemic has prompted individuals to focus more on their health and wealth.
61% of adviser respondents said their clients are now more focused on their health and longevity compared to before the onset of the pandemic.
60% of advisers said more of their clients are updating their wills and trusts.
While some social mixing restrictions remained in place, it became easier for advisers to engage with new clients during the second year of the pandemic.
Advisers reported that holding face-to-face meetings was an important factor for first-time clients. Still, growing confidence in delivering advice remotely has also made it easier for advisers and clients.
Ronnie Taylor, Chief Distribution Officer at Aegon, said:
“Demand for retirement advice has been increasing since the introduction of the pension freedoms, and the pandemic has further demonstrated the value of advice in this area. Over the last two years, individuals have increasingly reassessed priorities and long-term plans and have been prompted to focus more on health and longevity.
“The research points towards an increase in early retirement during the pandemic. Advisers are well placed to support clients through this and manage a sustainable income throughout retirement. We’ve become used to a volatile stock market in recent years and the research shows there is growing sophistication in the use of retirement planning tools to support safe withdrawal strategies. The uncertainty around the economic outlook with rising interest rates and high inflation means the robustness of financial plans is expected to be tested further.
“The transition to remote meetings and the huge acceleration of digital processes has opened up new opportunities for advisers as an alternative means of communication with clients. However, face-to-face meetings remain an important part of developing new relationships so it’s understandable the relaxing of social mixing restrictions has made client acquisition easier.”
Heather Hopkins, Managing Director of Next Wealth, said:
“The Covid pandemic has fueled demand for retirement planning advice as people re-evaluate priorities and look at options to retire early. Half of financial advisers told us that they have seen an increase in the number of clients looking to retire early through the pandemic.The complexity of this decision underscores the value of professional financial advice.”