2nd April 2015

Advisory firms set for pension freedoms, Fundsnetwork research reveals

• Overwhelming majority of advisory firms ready for reforms
• Advisory firms confident about their understanding of the new retirement rules
• However, client understanding remains low

The overwhelming majority of advisory firms are prepared for the pension freedoms that will come into effect in just a few days’ time, according to FundsNetwork’s Adviser Class of 2015 survey.

The recently launched Adviser Class of 2015 survey* follows on from the success of the Consumer Class of 2015 research, launched in September 2014. The adviser research polled over 200 advisory firms on their sentiments around the pension freedoms and the impact these reforms have had and will have on their businesses and the wider advice industry.

Overall, the vast majority of advisory firms (94%) said that they were either fully (32%) or somewhat (62%) prepared for the introduction of the pension freedoms on 6 April 2015. Just 3% said their firm is not prepared at all.

Advisory firms, in general, feel confident about their knowledge of the reforms and about advising on the new rules with nearly nine out of ten respondents (86%) saying they have a “good” understanding of which just under a quarter (24%) rated their knowledge as “very good”. However, 13% did indicate that they only have some understanding suggesting some firms require further education and support.

On the other hand, it was a different story with their customers with only 4% of advisory firms stating that clients have a good understanding of the new reforms. Just over one in two (52%) said that their clients have some understanding and 43% believed that their clients’ understanding of the new rules is poor.

Jon Everill, head of advisory services at FundsNetwork comments: “With just a few days to go until the reforms come into effect, it’s encouraging to see that so many advisory firms are geared up for the changes and feel confident about advising clients on the options that will be open to them.

“However, whilst advisory firms may have good understanding and are generally well prepared, it looks as if their clients are not. Advisers have a great opportunity to demonstrate the value they provide by helping clients understand the new rules and navigating them through the options to ensure that they get the best possible retirement outcomes.”

From April 6, advisers and their clients will have full access to the new pension freedoms via the FundsNetwork platform. Specifically the FundsNetwork Pension will offer a new flexi-access drawdown facility, along with flexible cash withdrawal and full support for the new death benefit rules that allow for pension assets to be passed on to beneficiaries.

FundsNetwork will continue to support advisers with new retirement content including guides and topical fact sheets that can be used to explain the changes to customers as well as providing advisers with help and support in making the most of the retirement opportunity.

Pensions, Retirement