Brexit has been named as the biggest threat for advice, chosen by just over half (51 per cent) of advisers surveyed in new research by Aegon.
A hundred UK advisers were asked by insurer and pensions provider Aegon what they see as the opportunities and threats to their sector over the next two years.
“It would take a brave person to attempt to predict with any certainty the macro economic or political implications of Brexit and how investment markets will perform as we seek a Brexit deal and then move through the process of leaving the EU,” said Steven Cameron, pensions director at Aegon.
However, it also scored highly on the opportunities list, with 27 per cent of respondents naming it as an advice opportunity.
“Advisers may fear that any damage to the UK’s economic performance may mean less new money for individuals and employers to invest. However, those with existing investments will need help to ride out short term uncertainty without damaging long term prospects, creating a major advice opportunity.”
For the second year running, DB to DC transfers tops the opportunities list with just under half (45%) of UK financial advisers viewing this as a key area for growth. This comes despite some commentators speculating that the transfer market may have peaked and as the FCA’s new guidelines on transfer advice begin to bed in.
Disappointingly, new models of advice or guidance from the Financial Advice Market Review were seen as an opportunity by only 10% of advisers, suggesting FAMR has not yet delivered to its potential. This raises the stakes for the FCA’s promised 2019 review of FAMR and the Retail Distribution Review.
The research showed pension scams were also considered a significant threat to the industry with just under a half (46%) of advisers worried about this issue. The recent implementation of the cold calling ban should hopefully reduce these concerns going forward.
Cameron concluded: “The biggest disappointment, if not surprise, is that the Financial Advice Market Review is failing to register as offering an opportunity.
“This joint Treasury and FCA initiative to help close the ‘advice gap’ generating 28 recommendations, all of which have been taken forward in some shape or form and really should have been an opportunity to further strengthen the advice market.
“While other Aegon research points to advisers continuing to support the principles, the unfortunate reality is nothing much has changed in practice. With the FCA promising a 2019 review of FAMR and the Retail Distribution Review, the stakes are high to find ways of delivering on some of this potential.”