From looming pension tax changes in the March Budget to a possible exit from the European Union, advisers will be braced for a number of bumps this year.
Insurer Zurich asked 131 advisers to rate the events they think will rock their boat hardest in 2016. Advisers gave ratings of 1 to 5 – 5 affecting their business least and 1 the most.
Here is what they said…
5 Scottish independent rate of tax
Scotland may want to split its income taxation from the UK system but most advisers don’t seem to think it will affect them. The average rating for this was 4 out of 5.
4 Brexit
Zurich’s research showed the majority of advisers are not in favour of Brexit (51.15%, against 35.11% who would rather leave the EU) as many thought it would have a negative effect on their clients’ investments. However, not all agreed.
Overall Brexit got a rating of 3.26 as almost half of advisers questioned believed it would hardly affect their business.
3 A review on due diligence
It seems most advisers are somewhat unsure of the effect the Financial Conduct Authority’s review of due diligence would have on their business as most gave it a neutral rating of 3.
The FCA has been looking at advisers’ research processes in the last year, in particular, their due diligence on the products and services they recommend, including outsourced business. Findings are due out imminently.
2 Financial Advice Market Review
Advisers are more weary of what is to come out of the Treasury and FCA’s joint review of the advice market.
Dubbed Retail Distribution Review 2, many will want to know whether further widespread measures will be taken following the review.
The work was initially undertaken to find ways to bridge the advice gap left behind by RDR. Most advisers think they will be somewhat affected by it.
1 Changes to pension tax relief
Possible changes being made to pension tax relief is advisers’ expected number one disrupter this year. 80% or respondents said any changes made would affect their business, either strongly or somewhat.
The Treasury has been consulting on new options for pensions taxation over the past few months, with a view to cut his £35bn pension benefits budget, the outcome of which is expected to be announced in the March Budget.
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