The Coronavirus Crash threw a spanner in the works for those who were planning to retire this year. As a result, pension planning services are heavily requested by UK investors and need to figure prominently in discussions during the crisis.
GlobalData‘s 2020 Global Wealth Managers Survey confirms strong demand for pension planning services among high net worth investors in the UK. It is also the only investment product or service for which future demand is expected to increase by over 40% in the next 12 months. Retirement income is one of the key reasons investors take a risk with their wealth in the first place. In these testing times, it is no surprise demand for advice on the topic is prevalent. Investors want to know their long-term pension goals are assured.
Although UK financial markets have experienced some level of recovery since March 2020, there is still a significant part of the mountain to climb before stability is achieved. That goes for customers’ pension pots too, as many are unlikely to be at pre-lockdown levels yet – especially those that lean more heavily towards riskier assets in the local stock market. It will be up to wealth managers to prove their worth during this period and weather the storm client portfolios will have experienced this year.
UK regulator the Financial Conduct Authority has also added its take on how advisors could manage conversations with clients regarding their pensions to reduce any further risk. Wealth managers should ensure they keep in line with regulation as they help their customers navigate out of this downturn, as any potential penalty is the last thing players need.
Although advisors that offer pension planning services will have their work cut out, they do have the benefit of being in the game already. Just under a fifth of wealth managers in the UK do not offer pension planning services. Not having this in-demand product could mean players will lose out on new clients who require these services. Additionally, they will be facing increased competition from new entrants. This year, both Wealthify and Vanguard introduced self-invested personal pension products on their platforms, so offering pension services would be advantageous in the short and long term as competition will only intensify.
The Coronavirus Crash has put finances into turmoil in 2020. Investments suffered and retirement plans were delayed in some cases. Wealth managers that offer pension planning services must ensure they can support their retiree and pre-retirement clients, particularly by providing the right advice. Doing so will not only keep customers loyal and happy but also uphold their brand reputation amid the difficulties of navigating the pandemic.