The survey questioned more than 800 advisers to reveal their clients’ financial concerns, where they see areas of business growth, and what’s needed to make this growth a reality.
Clients’ top concerns
For most advisers, retirement planning is top of clients’ most pressing financial concerns with 77 per cent of advisers saying this is what people are most worried about. Investments (59 per cent) and inheritance tax planning (56 per cent) are next on the list of concerns. At the bottom of the agenda is generic saving and tax concerns, along with planning for children’s education.
Business growth opportunities
Not surprisingly, clients’ top concerns shape what advisers think will drive their business growth over the next five years. Retirement planning is predicted to be a big growth area with 41 per cent of advisers predicting investment products will drive their business, followed by 26 per cent who back pension products.
Area of overall business growth
Investmentproducts - 41 per cent
Pensionsproducts -26 per cent
Mortgageproducts - 16 per cent
Equity release products - 13 per cent
Retirement planning
With A-day imminent there have already been developments in the retirement provisions market and advisers continue to see this as a growth area.In particular new types of pension products, are driving opportunities for advisers.
Area of retirement business growth
Pensionsproducts - 39 per cent
Investment products - 26 per cent
Equity release products -18 per cent
Alternative investments -9 per cent
The rise of equity release
In addition, equity release continues to be a key area for growth. 18 per cent of advisers think this will form the biggest growth area in the retirement provision market over the next five years. What’s more, over 94 per cent of advisers think that people retiring within the next ten years are likely to consider using equity in their properties to supplement their income.
When asked what was most important to them when considering an equity release product, 30 per cent of advisers stated that flexibility or the ability to draw down money was most important (18 per cent and 12 per cent respectively). 29 per cent said the interest rate. For someone who does not need all the money up-front, a more flexible lifetime mortgage can prove cheaper in the long run, as they are only charged interest on the amount they have borrowed.
Most important feature of equity release products
Lowinterest rate - 29 per cent
Nonegative equity guarantee -23 per cent
Flexibility- 18 per cent
Easyto understand- 16 per cent
Abilityto drawdown money- 12 per cent
Advisers feel there is more to be done to drive this growth area by improving customer knowledge. 83 per cent said that they don’t think consumers are as informed as they could be and 84 per cent think that provider and trade bodies should be doing more to inform consumers.
Ali Crossley, director of lifetime mortgages at Prudential UK, said: “Retirement planning is clearly a core focus for advisers as people increasingly realise they cannot rely on the state alone to provide for them in old age. For many, this means building up a portfolio of savings, investments, and a pension – and for some, it also means planning how to use the equity in their property.
“Many advisers predict that the lifetime mortgage market will grow.We at the Pru support this prediction. We know that confidence among consumers is increasing, and now nine out of ten advisers think that people will consider releasing equity to supplement their retirement income.
“We believe product innovation will drive business growth in the lifetime mortgage sector. Products with enhanced flexibility and lower overall costs – like our Property Value Release Plan – are already moving the market forwards.”
