Navigating the advice gap: Supporting financial advisers and consumers during the transition to retirement
The UK financial services industry is facing an impending “advice gap” as a large number of financial advisers are set to retire in the next few years. This presents a significant challenge for consumers, as a lack of financial advice can have serious consequences for their financial well-being.
According to a report by the Financial Conduct Authority (FCA), around two-thirds of financial advisers in the UK are aged 55 or older, and are likely to retire in the next decade. This could leave a significant number of consumers without access to financial advice, particularly those in need of advice on complex financial products such as pensions and investments.
Research by the Chartered Institute for Securities and Investment (CISI) also found that by 2025, the UK could face a shortage of up to 15,000 financial advisers. This is a significant concern, as the CISI estimates that around 70% of the UK population requires some form of financial advice.
The advice gap is not only a problem for consumers, but it can also have an impact on the broader economy. A lack of financial advice can lead to poor financial decision making, which can result in a decline in consumer confidence and spending, and ultimately, a slowdown in economic growth.
The FCA has acknowledged the issue and has taken steps to address the advice gap. In 2019, the FCA published a consultation paper on “Advice on Pensions and Retirement Income”, which proposed measures to make it easier for consumers to access advice on pensions and retirement income. Additionally, the FCA has also proposed a “pensions advice allowance” which would allow consumers to use a portion of their pension pot to pay for financial advice without incurring a tax penalty.
In conclusion, the advice gap in the UK financial services industry is a significant concern, as a large number of financial advisers are set to retire in the next few years. This could leave a significant number of consumers without access to financial advice, particularly those in need of advice on complex financial products such as pensions and investments. The FCA has acknowledged the issue and has proposed measures to address the advice gap, but more needs to be done to ensure that consumers have access to the financial advice they need.
When it comes to considering potential solutions as financial advisers approach retirement, many are faced with the challenge of finding a suitable financial option that will allow them to retain an income into retirement. The Right Retirement Plan from The Right Mortgage & Protection Network is an excellent option for financial advisers looking to maintain an income stream into retirement.
The service allows advisers to receive 50% on commissions for all new business transacted through the plan and 75% on commissions for any renewal business. This means that advisers can continue to earn income from their existing clients, even after they have retired. Additionally, the plan offers no contractual tie-ins and no fees to join the service, which makes it an attractive option for advisers.
One of the key benefits of using The Right Retirement Plan is the range of options available for advisers. The plan offers a full retirement plan, which is designed for advisers who are looking to fully retire from the industry. Additionally, the plan also offers a hybrid service option, which is designed for advisers who want to reduce their working hours, and a locum service option, which is designed for advisers who want to continue working on a part-time basis.
Using The Right Retirement Plan also provides benefits for consumers. The plan is in line with the Financial Conduct Authority’s (FCA) Consumer Duty focus, which aims to improve the quality and accessibility of financial advice for consumers. This means that consumers will continue to have access to high-quality financial advice even after their financial adviser has retired.
In conclusion, The Right Retirement Plan from The Right Mortgage & Protection Network is an excellent option for financial advisers looking to retain an income into retirement.
Sam Clark, Director, The Right Retirement Plan