When asked to identify their biggest concern in relation to the DB transfer market, advisers were equally split around:
- the responsibility on providers if a transfer proves not to be the right option (25%);
- not having enough time or the right tools to deal with the number of transfer enquiries (25%); and,
- not having the qualifications to advise on DB transfers (25%).
The remaining respondents said they were concerned that providers were not doing enough to represent the downside of DB transfers (22%), with just 3% highlighting a lack of reporting on inflows into drawdown schemes by providers.
Despite these concerns, just 15% of advisers intend to change their approach to advising clients on their DB transfers.
Importance of advice
“More than ever, advisers are facing increased scrutiny around the advice they give in relation to DB transfers, at a time when the demand for advice is peaking,” said Nick French, managing director and head of UK Wealth Management at Russell Investments.
“There is a clear sense that providers need to shoulder more of the responsibility, but the ultimate objective for the industry should be ensuring that DB transfers are sustainable in retirement.
“The regulator is working towards this, and a review should increasingly highlight the importance of financial advice.”
The poll also revealed the asset allocation changes advisers expect to make by the end of year.
Almost half (44%) expect to increase their allocations to multi-asset, while 15% envisage an increase to cash holdings, 12% plan an increase to passives and 11% foresee an increase to equities.
Just 5% plan on increasing allocations to fixed income, real assets or real estate and 3% to private equity.
Regulation top of mind
Regulation remains one of the biggest themes on the mind of advisers, with almost a fifth (18%) identifying it as one of the top three drivers of change in the investment industry in future.
Almost a third (30%) expect the increasing role of technology to be one of the biggest drivers of change and one fifth think greater transparency of fees and charges will drive the industry.
The poll also found that an overwhelming majority of advisers felt confident that they will be able to comply with the requirements of Mifid II, ahead of its formal implementation on 3 January 2018.
Over half (56%) of those surveyed said they felt very confident about their ability to comply with the new regulations, with an additional 26% feeling slightly confident. Just 9% felt not very confident, or not at all confident.