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Over 60 per cent of advisers expect to increase investment management outsourcing


Over 60 per cent of IFAs expect to significantly increase their outsourcing of investment management in the next 12 months, according to a survey conducted by Wellian Investment Solutions.

This is due to the impact of recent changes to pension legislation.
The new rules afford greater flexibility to those approaching or at retirement by removing the maximum ‘cap’ on withdrawal of funds and minimum income requirements for all new drawdown funds. For advisers this means that pension funds will be managed in the same way as regular savings accounts which may be accessed as and when required.
Consequently, a large number of those surveyed at the Wellian Symposium have expressed concerns about managing client expectations in light of these changes and believe the principal challenge will be to educate clients on the importance of guaranteed income, ensuring that they do not overspend or deplete their pension funds in the early stages of retirement.
The survey also revealed that over 50 per cent of IFAs expect to increase their use of DFMs in the next 12 months. This has been attributed to heightened demand for greater liquidity and diversity of assets within investment portfolios following these recent changes.
Eric Clapton, CEO of Wellian Investment Solutions, says: “The success of advisory businesses operating in the post Budget, post RDR landscape will largely depend on how they navigate their way through this period of significant change. Changes to pension legislation present either a major challenge or a major opportunity for advisers, depending on how they adapt themselves to the new flexibility afforded to clients at retirement age.
“We understand that the majority of advisers are worried about managing client expectations at this time, however those who have the right level of support in place from their investment manager are primed to turn the challenges ahead into a fantastic business opportunity.”

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