IFAs report increase in client concerns after pension reforms

Barings’ quarterly research, which canvasses investment sentiment from UK financial advisers, found that only 1% had noted an increase in ‘at-retirement’ clients investing in traditional annuity products, while 17% noted an increase in enquiries regarding ‘unsuitable’ products. Two fifths (40%) noted an increase in clients seeking to cash-in or derive cash from their pensions.

One in seven (15%) of respondents noted an increase in their ‘at-retirement’ clients investing in income-focused investment products, while 7% had noted an increase in clients investing in target return or target income products.

The research also found that nearly half (46%) of IFAs said that there had been a noticeable increase in concerns from their ‘near-retirement’ clients regarding the impact of the changes, with 17% saying there has been an increase in clients looking to switch investments since the new rules came into play.

Rod Aldridge, Head of Wholesale Distribution – EMEA, Baring Asset Management, said:

“The changes introduced in April represent a profound development in the way people can save and pay for their retirement. As such, it was only natural that many intermediaries would notice big increases in client concerns and questions about the changes and the impact on their investments.

“Through its range of multi asset products Barings has positioned itself to be a leading provider of long-term investment products as well as income-focused solutions. The Baring Dynamic Capital Growth Fund, launched last year, for instance, is designed to bring our extensive multi asset capability and experience to market at a lower price point which will suit members of pension schemes that fall under the new auto enrolment legislation which came into effect in April 2015.”