Advisers name Brexit as biggest threat

Brexit has been named as the biggest threat for advice, chosen by just over half (51 per cent) of advisers surveyed in new research by Aegon.

However, it also scored highly on the opportunities list, with 27 per cent of respondents naming it as an advice opportunity.

Commenting, Aegon pensions director, Steven Cameron said: “Advisers may fear that any damage to the UK’s economic performance may mean less new money for individuals and employers to invest.

“However, those with existing investments will need help to ride out short term uncertainty without damaging long term prospects, creating a major advice opportunity.”

Pension scam came second in the list of threats, with 46 per cent naming it as an issue, while the Financial Conduct Authority (FCA) Suitability Review was named by 34 per cent of advisers as a threat.

DB to DC transfers was chosen as the biggest opportunity for the advice industry for a second year in a row, with 45 per cent naming it, despite some commentators speculating that the transfer market may have peaked and as the FCA’s new guidelines on transfer advice begins to “bed in”.

Cameron added: “It is no surprise that DB to DC transfers continues to be viewed as the biggest opportunity for advice.

“Whilst transfers volumes may have declined from a peak at the beginning of 2018, demand for such advice continues to outstrip supply and as advisers gain confidence in the recent FCA guidance, which sets out its expectations of ‘what good looks like’, we expect to see numbers rise again.”

The pensions dashboard and non-Brexit related political uncertainty came in joint third, with 22 per cent of advisers naming each.

There is some concern surrounding the new models of advice or guidance from the Financial Advice Market Review, as only 10 per cent of advisers saw it as an opportunity.

Cameron concluded: “The biggest disappointment, if not surprise, is that the Financial Advice Market Review is failing to register as offering an opportunity.

“This joint Treasury and FCA initiative to help close the ‘advice gap’ generating 28 recommendations, all of which have been taken forward in some shape or form and really should have been an opportunity to further strengthen the advice market.

“While other Aegon research points to advisers continuing to support the principles, the unfortunate reality is nothing much has changed in practice. With the FCA promising a 2019 review of FAMR and the Retail Distribution Review, the stakes are high to find ways of delivering on some of this potential.”

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