The relentless stream of speculation ahead of the Budget is causing client anxiety and prompting some to take “irreversible action”, a new report has revealed.
The rumor mill has been rife about possible tax changes and reduced pension allowances in the lead up to the chancellor’s announcement on 26 November.
As part of its annual Meaning of Value research, carried out in collaboration with the Lang Cat, Royal London has been gauging adviser sentiment to uncover the real impact that uncertainty is having on clients and exploring how firms are responding.
Client anxiety amid Budget speculation
Overall, the findings reveal that many advisers are prioritising long-term planning rather than reacting to short-term noise, but a considerable proportion report that speculation is causing client anxiety, with some being spooked into taking irreversible action.
When it comes to managing the noise, adviser firms are taking a variety of approaches to client reassurance. Two fifths (40%), are proactively urging clients to keep focused on their established financial goals, while 30% are confident enough to ignore the speculation and respond to client concerns only when asked.
Notably, 16% of advisers are taking a personalised approach, reaching out directly to reassure clients of the robustness of their plans, and around one in ten (9%) are monitoring the situation and may make pre-emptive adjustments to clients’ financial plans where appropriate.
However, eight in 10 (81%) say that the level and depth of changes being discussed this year is creating unnecessary panic, reporting that the uncertainty is prompting a noticeable increase in clients reaching out to them.
A further 16% of advisers felt that it was not only unhelpful, but potentially damaging, going on to say that some clients have already taken actions which could materially affect their longer-term plans.
Looking Ahead: From beach reads to Budget speculation
Jamie Jenkins, director of policy at Royal London, said: “It’s clear that when it comes to financial advice, managing client anxiety comes with the territory and is a key element of the value delivered by advisers.
“It also underlines the value advisers bring by guiding clients through uncertainty, reinforcing the value of steady, long-term planning.
“The research highlights the variety of responses from advisers with some proactively reassuring clients, others only responding when approached, and a minority considering making pre-emptive adjustments to financial plans.
“While the majority see only a limited rise in client concern, it’s telling that speculation this year is prompting real distress among some clients with some potentially taking harmful actions ahead of any announcement.”
Royal London’s Meaning of Value research tracks the importance of trusted advice and the role of financial advisers with their clients.
It highlights the importance of supporting clients during periods of uncertainty such as Budget speculation as well as reinforcing the value of long-term financial planning.
