Article date: 18 June 2015
• Encouraging people to save more into their pension is the number one priority
• New pension freedoms and growth of the retirement market are key opportunities
• Concerns over ‘economic uncertainty’ and ‘remaining profitable’ fall year-on-year
Encouraging people to save more into their pension should be the government’s number one financial priority (48%), results from the latest Aviva Adviser Barometer show. This is followed by improving financial education (47%) and addressing the advice gap (41%).
With almost half of advisers (48%) believing the new majority government will be positive for their business (and fewer than 1% 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.
Adviser opportunities and concerns
Advisers see the greatest opportunities in the current market as the new pension freedoms (63%) and the growth of the retirement market (49%). Auto enrolment and the growth of workplace savings also feature, with one in three (30%) believing this to be an area of opportunity.
Advisers’ concerns have also lessened, with one in ten (11%) stating they have ‘no concerns’ at all. Fears about economic uncertainty have halved since March 2013 (31%) down to 15% today, and over the same period concerns about remaining profitable have also dropped – down from 51% to 32%. Generating revenue and recurring income follows the same trend dropping steadily from 31% to 25% over the last two years, as confidence in the economy has grown. As previously reported, advisers still remain anxious about professional indemnity costs (48%) and more so, regulatory fees and levies (51%).
The analysis shows consistency in the type of advice model selected by advisers. Four out of five (79%) advisers continue to offer independent advice, and 15% offer restricted advice.
A third of advisers (33%) 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% intending to recruit, and 95% planning to stay in the market.
Employer clients and auto enrolment
Two thirds of advisers (67%) work with corporate clients. Of those offering an auto-enrolment solution, four out of five (79%) 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%) 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% of advisers offering a tailored service. Payroll (53%) and data management (38%) 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%), and a further 23% are considering or planning to charge fees but haven’t started yet. Advisers believe that pensions (92%) and auto-enrolment staging (48%) 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%); company pensions (79%), and health insurance (55%). The number of advisers offering additional benefits such as company share schemes (2%), child care vouchers (5%) or mobile phone schemes (2%) are much lower.
Tim Orton, CEO Aviva Platform, said:
“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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Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 34* million customers, across 16 markets worldwide
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