Following the implementation of Consumer Duty, the price and value outcome has been identified as the most challenging for advisers.
While price should be relatively easy to assess, the value of any product or service is always difficult to define – and advice is no different and perhaps more challenging as it’s an intangible.
However, the results of the most recent Schroder adviser survey offer up some useful insights into the value of advice.
Market challenges
The survey was conducted in the immediate wake of ‘Liberation Day’ and the introduction of Trump’s tariffs, which promptly led to market volatility. Survey responses from advisers showed:
- Expectations of higher equity market returns dropped to 15% from 23%
- 64% expected higher market volatility, a sharp increase from 43% in November 2025-Expectations of lower global growth tripled from 8% to 24%
- 77% expected increased disruption due to geopolitics
- Client sentiment moved to bearish, rising from 18% in November 2024 to 43%
There have been several periods of volatility in recent years, and as the graph below shows, following the most recent period of market volatility, valuations have recovered.
There may be more volatility ahead, but advisers can help their clients navigate turbulent markets
The portfolios of advised clients who remained invested will have recovered from the falls that followed the initial tariff announcements.
There may be more volatility ahead, but advisers can help their clients navigate turbulent markets, encouraging them to remain invested. While it may feel safer to exit the market, moving to cash is unlikely to be the appropriate course of action.
This aligns with work conducted by Benchmark and Boring Money, which identified the key factors of value. Interviews with 1,000 advised clients in the UK highlighted that the most important value metric was ‘trust and peace of mind’.
The recent volatility and ensuing conversations with clients around remaining invested support this – in addition to the value delivered to clients’ portfolios who did not make a knee-jerk reaction and disinvest at the market’s low point.
Pension changes
The Autumn budget last year threw a curve ball into many financial plans with 92% of advisers who took part in the survey indicating that they are having conversations with clients about the impact of the changes to any unused pension funds, which will now be included in the estate and attract Inheritance tax.
While pension products were historically designed to produce an income in retirement, many clients hoped that income could come from other sources, enabling them to pass some, or all, of their pension to loved ones without a potential 40% tax charge.
Nearly half of the advisers taking part in the survey reported that nearly half of their clients will be impacted by this change and will require a review of their financial plans. This has prompted many clients to consider passing on wealth earlier than planned.
The changing landscape for pensions planning and plans for passing on wealth now requires careful consideration
With the changes due to take effect from April 2027, time is ticking. 81% of advisers have said that they expect clients to increase their current drawdown levels and gift out of normal expenditure.
The second highest planning option was identified as changing the order in which assets are drawn down from different tax wrappers.
The changing landscape for pensions planning and plans for passing on wealth now requires careful consideration and likely to be complex requiring advice for many clients.
Cash versus long-term investing
Around 72% of advisers reported that the debate around reducing the limit for investing into Cash ISAs (e.g. to £5,000) would encourage an increase in investing.
We have experienced a period of attractive cash interest rates which many clients have benefitted from in the short term.
However, all evidence suggests that investing in the market delivers higher returns.
While 92% of advisers reported that they continue to have conversations with clients about holding cash as opposed to investing in the market – a similar level to previous surveys – 35% of advisers have said that these conversations are occurring less frequently than before.
Although interest rates have appeared attractive, advisers can add significant value by discussing with clients the merits of long-term investment versus short term interest rates.
Reducing the advice gap
One of the key objections to financial advice is perceived cost, yet the latest FCA Financial Lives Survey indicates that ‘only 9% of adults received regulated financial advice about investments, saving into a pension or retirement planning’.
Can advisers deliver value to more clients? The survey offers some clues.
The number of advisers now using AI technology such as Chat GPT has now increased to 37% and only 7% of advisers indicate that they will never use AI – a significant reduction from 27% only two years ago.
Could this reduce the time and cost required to serve clients, enabling advisers to increase capacity?
Additionally, 46% of advisers said that proposals for targeted support would prompt them to consider a new proposition for some or new clients, and 53% of advisers indicated that they would develop a lighter touch, lower cost proposition to help retain lower value clients who are no longer economic for them to service.
This will be an area for future surveys to explore further.
In summary, the survey identifies the value which advisers deliver to their clients not only today but potentially to a broader group of clients in the future – this has to be welcomed.
