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Advisers must look at long term outlook for client portfolios following pension reforms


Advisers must start to look at the long term outlook on behalf of their clients in light of the recently implemented pension freedoms, according to Wellian Investment solutions.

The DFM has claimed that too many firms are currently focussed on delivering short to mid-term solutions for clients at retirement rather than looking at the outlook for their portfolios for the duration of their lifetime.

Since changes to the pension legislation were introduced earlier this year making annuities non-compulsory for retirees, the average ‘life span’ of the average adviser’s client has now extended from between the ages of 45-65 right up to 70 and 80 years of age. This means that advisers now have an extended role to play for the majority of clients and have further opportunities for business growth, Wellian says.

In order to make the most of the opportunities arising from the new legislation, Wellian has said that advisers must now shift their focus to create investment solutions designed for the duration of the client’s lifetime. These solutions must be tailored to meet the needs of the entire family and must be suited to facilitate passing wealth down to children and beneficiaries as tax efficiently as possible.

Alan Durrant, Chief Executive of Wellian Investment Solutions (part of the Harwood Capital Group) says: “Much of the current debate has been focussed on the short to medium term outlook for clients. However, advisers should now be shaping their business models outside of the 20 year client ‘window’ between the ages of 45-65 to take into account the likelihood of holding onto client assets for up to 40 or even 50 years into the future.

“Many clients are now seeing the value in remaining invested in medium risk asset classes such as lower risk equities while the prospects for cash and fixed income remain poor. Naturally, this presents advisers with a significant opportunity to expand and adapt their existing business models accordingly. Similarly, maintaining and investing in client relationships now plays a more vital role in today’s market than ever before. Therefore, outsourcing any other core business functions such as fund research and investment management could pay huge dividends for advisers in the months ahead.”

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