44% of advisers expect Investment Pathways to have no effect on at retirement advice demand

Nearly half (44 per cent) of financial advisers expect Investment Pathways to have no effect on the demand for at retirement advice, whilst 11 per cent predicted that they could increase demand, according to research from Aegon.

In comparison, the survey found that nearly a third (32 per cent) expected the pathways to reduce demand, whilst just 1 per cent expected them to reduce demand “significantly”.

Aegon pensions director, Steven Cameron, highlighted the expectation that there could be an increase in professional advice as a "positive outcome", reiterating that the Investment Pathways should not be a substitute for financial advice.

“Interestingly," he commented, "11 per cent of advisers expect pathways to increase demand for retirement advice, as by going through the pathways process, customers gain a better understanding of the importance of the choices they’re making, and the limited help pathways offer."

He continued: "We’d see this as a positive outcome, as professional advice will offer a personal recommendation on not just where to invest but also on how much income can safely be taken to last throughout life or meet other retirement objectives.

"Seeking advice can also avoid individuals paying more income tax than they need to.

“While Investment Pathways will offer some help to those who choose to ‘go it alone’, it’s really important for those approaching retirement to understand that they won’t replace the benefits of taking professional financial advice.”

More broadly, Cameron noted that the research has shown that advisers have mixed views about whether pathways will lead to more or fewer individuals seeking retirement advice.

"Mixed views are to be expected as much will depend on how pathways are presented and explained to customers, which won’t be clear until they are up and running," he clarified.

The investment pathways, which went live today (1 February), are expected to provide greater support to customers with defined contribution (DC) pensions who decide to take income via drawdown and decline financial advice.

However, industry research recently found that despite more than half (60 per cent) of prospective retirees supporting the introduction of Investment Pathways, just 44 per cent said they will actually use them, which in turn has prompted concerns over the potential impact of inertia.

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