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UK advisers rank their top financial priorities for the new government

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Encouraging people to save more into their pension should be the government’s number one financial priority (48 per cent), according to results from the latest Aviva Adviser Barometer. 

This is followed by improving financial education (47 per cent) and addressing the advice gap (41 per cent).

With almost half of advisers (48 per cent) believing the new majority government will be positive for their business (and fewer than 1 per cent believing it will be negative), these priorities reflect advisers’ hopes and desires on behalf of their clients and the industry as a whole.

Advisers believe the new government needs to focus on making sure more people save more money into appropriate products, and can access the advice necessary to make the most of their money through retirement.
 
Advisers see the greatest opportunities in the current market as the new pension freedoms (63 per cent) and the growth of the retirement market (49 per cent). Auto enrolment and the growth of workplace savings also feature, with one in three (30 per cent) believing this to be an area of opportunity.

Advisers’ concerns have also lessened, with one in ten (11 per cent) stating they have ‘no concerns’ at all. Fears about economic uncertainty have halved since March 2013 (31 per cent) down to 15 per cent today, and over the same period concerns about remaining profitable have also dropped – down from 51 per cent to 32 per cent. Generating revenue and recurring income follows the same trend dropping steadily from 31 per cent to 25 per cent over the last two years, as confidence in the economy has grown. As previously reported, advisers still remain anxious about professional indemnity costs (48 per cent) and more so, regulatory fees and levies (51 per cent).
 
The analysis shows consistency in the type of advice model selected by advisers. Four out of five (79 per cent) advisers continue to offer independent advice, and 15 per cent offer restricted advice.
A third of advisers (33 per cent) are already qualified to, or are looking to achieve, Chartered status (QCF level 6) in the next 12 months.

Advisers’ future plans also remain steady for the year ahead, with 32 per cent intending to recruit, and 95 per cent planning to stay in the market.
 
Two thirds of advisers (67 per cent) work with corporate clients. Of those offering an auto-enrolment solution, four out of five (79 per cent) have seen an increase in demand from small businesses looking for advice in line with their auto enrolment staging dates, with the vast majority of new leads (88 per cent) coming through existing client, accountant or partnership referrals.

Advisers are offering a range of different propositions to service SME clients’ auto-enrolment needs, with 43 per cent of advisers offering a tailored service. Payroll (53 per cent) and data management (38 per cent) are the most difficult elements to advise employer clients on, according to advisers.
Two thirds of advisers are already generating fees from employer clients (63 per cent), and a further 23 per cent are considering or planning to charge fees but haven’t started yet. Advisers believe that pensions (92 per cent) and auto-enrolment staging (48 per cent) will be the main areas for fee generation.

The most popular services that corporate advisers are currently offering their employer clients are: life insurance / death in service benefit (84 per cent); company pensions (79 per cent), and health insurance (55 per cent). The number of advisers offering additional benefits such as company share schemes (2 per cent), child care vouchers (5 per cent) or mobile phone schemes (2 per cent) are much lower.
 
Tim Orton, CEO Aviva Platform, says: “It is interesting to see how concerns about economic uncertainty and remaining profitable have continued to fall, with the greatest areas of opportunity being the new pension freedoms and the retirement life stage. A thriving adviser market is great news for platforms, which can help advisers make the most of their clients’ retirement savings. With a new majority government in place since we last surveyed advisers, ‘encouraging people to save more into their pension’ is ranked as top of the financial priority list for David Cameron’s government.

“Advisers see the gap in advice as a priority to be addressed and we would echo this concern. It’s vital that consumers have access to a range of support including financial advisers, organisations like Pension Wise and providers like Aviva, to help them with the complex choices they face. Engaging a wider community in managing their finances will both encourage better saving habits and support a buoyant professional, advice market.”

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