According to the KPMG report, the trend may have adverse affect for the long-term savers as regulations are leading to advisors shying away from providing advice.
Tom Brown, European head of investment management at KPMG remarked, "Whilst lower risk strategies will be appropriate for many clients, particularly those at, or near retirement, there will be clients who are at a stage of life when they could be taking more risk with some of their investments, to improve longer term rewards and meet their retirement aspirations."
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"The long term policy impact on 2030 retirees, who are now in their 40s and should be building their long-term savings, could be significant," he added.
Brown opined that advisors recommend low risk products as they fear punishment by the Financial Services Authority for mis-selling riskier products.
Further, the report has brought out the impact of increasing advice costs under the new regulatory regime that could lead to younger investors preferring to manage their own portfolios, rather than taking professional advice.
"As the onus is increasingly left to the individual to make provisions for their long-term savings, it is alarming that people are likely to spend more on a plumber than on financial advice, which could set them up for retirement," Brown stated.
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