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Advisers urge retirement savers to lock-in Brexit bounce gains

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Advisers are focusing on locking in the so-called “Brexit bounce” for retirement savers amid concerns that stock markets could be heading for a significant correction this year, according to research from MetLife.

The research shows that almost one in three (31 per cent) of advisers plan to contact clients about protecting pension savings by locking in gains they have seen since the EU Referendum result and 67 per cent plan to offer clients a review of their finances.
 
The need to protect capital is even more pressing for clients close to retirement – around 44 per cent of advisers are recommending clients planning to retire within five years should lock-in gains now underlining the need for guarantee and lock-in solutions.
 
A major motivation is growing fears about a stock market downturn – with six out of 10 advisers (58 per cent) saying they are concerned about a significant correction this year which increases risks for savers about to retire.
 
The FTSE 100 has surged by more than 6 per cent since the referendum result after an initial slump and is now at a one-year high with the Bank of England rate cut and GBP170 billion stimulus package boosting markets and potentially returns for retirement savers who can lock-in gains.
 
MetLife’s research found advisers have already seen a surge in inquiries about retirement planning since the referendum – 17 per cent say they have been contacted by clients asking for retirement planning reviews while 15 per cent have been asked about guaranteeing funds.
 
Advisers have been working hard to support clients after the result – around 60 per cent have contacted existing clients offering reviews of their finances while 22 per cent have asked clients to reassess their capacity for loss and to re-run risk profiling tools.
 
Simon Massey, wealth management director at MetLife UK, says: “The predictions of doom and disaster after the referendum vote have so far been proved wrong with the initial shock turning to a market surge, a so-called ‘Brexit bounce’.
 
“But, those clients nearing retirement are faced with decisions that ultimately will impact the rest of their retired lives. There’s never been a more appropriate opportunity for advisers to consider solutions that offer guarantees and the potential to lock-in current gains.
 
“Clearly there is real nervousness out there with advisers concerned about potential downturns and braced for market volatility ahead with most expecting a significant correction this year as the picture becomes clearer
 
“Clients still want and need to invest but many are re-adjusting their attitude to risk. They are focused on guaranteeing and capturing gains while they can, while accepting that uncertainty is here to stay for the foreseeable future.”
 
MetLife’s says its range of retirement and investment solutions have been designed to address the need for a guaranteed level of income for life in retirement or a guaranteed capital amount at the end of a chosen term.
 
MetLife’s stocks and shares ISA Portfolio and its Retirement Portfolio, which was designed for pension freedoms, provide a choice of income and capital guarantees.
 
Customers can choose from a range of investments to build a personalised plan suited to the levels of risk they are willing to take, while having the choice of a valuable guaranteed level of income for life from age 55 or a guaranteed capital sum at the end of their chosen term.
 
In addition, the plans offer the potential for daily lock-ins of investment gains while enabling savers to start, stop and restart their income to suit their personal needs.

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