Four-fifths of financial advisers have seen an increase in enquiries linked to pension freedom-related advice, according to research.
Two-thirds (68%) of the 98 intermediaries who responded to the Investec Wealth & Management study said they expected that number to continue growing over the next five years. A similar percentage said they have received enquiries about switching from defined benefit (DB) to defined contribution (DC) schemes.
Indeed, interest in carrying out such switches is expected to prove a good source of future business – the survey found that, on average, advisers predict they will continue to receive similar enquiries for another nine years.
“Advisers have seen strong levels of demand among pension savers as a result of the pension freedom reforms, many of which have involved guidance around DB to DC transfers,” said Investec Wealth & Investment head of intermediary services Mark Stevens. “Our research suggests there is little sign of this new business stream slowing down anytime soon.”
Susan Hill Financial Planning Chartered financial planner Susan Hill is one adviser to have noticed a significant increase in pension freedom-related enquiries.
“I have seen an increase in the number of people who are 55-plus enquiring about DB schemes and a lot of 50-year olds who are preparing themselves for when they retire. I’m getting around four or five enquiries a week, whereas it was two or three per month before.”
IFS Wealth & Pensions director Alan Chan has seen similar effects since the new legislation came in. “All the pension freedom enquiries we get are defined benefit-related,” he said. “Clients want to do something now rather than be paid an income.”
Not only are intermediaries seeing more pension freedom-related business, the advice given looks set to be on greater sums of money. Almost three-quarters (73%) of financial advisers surveyed were expecting the average portfolio size of those seeking pension-freedom advice to grow.
Of those advisers, 22% expect the average portfolio will grow to more than £50,000, 34% to more than £100,000 and 7% to in excess of £250,000. Just 17% of advisers were expecting a fall in the average portfolio size.
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