As I sit here in London, having just gone down seven flights into the pouring rain for a false fire alarm, I can’t help thinking about the issues advisers face daily – especially with Budget speculation swirling and clients tempted to take unnecessary action before the full picture is known.
When I reached the bottom of the stairs, the alarm stopped. It gave me much the same feeling I had on 11 November, when the Treasury confirmed it had no intention of touching tax–free cash. I had been confident it was all noise – just as I was confident there was no fire – but not confident enough to stay at my desk.
The challenge is that it’s never just one alarm. If I reacted to every sound, I could be up and down those stairs several times a day. Budget speculation works the same way. And this constant noise has an impact.
SJP’s recent Real Life Advice research highlights it clearly, with more than two in five people (45%) admitting they feel more uncertain than they did two years ago because of concerns around government support for pensions, welfare and long–term care.
Advisers will inevitably face conversations with clients agitated by short–term noise and tempted to act
For advisers, filtering out this noise comes more naturally. We think through the practicalities of potential changes and how long they would take to implement. This gives us an advantage our clients don’t necessarily have, and allows us to guide them through turbulent periods.
Advisers help quieten the noise and keep clients on track. In fact, our research shows that almost everyone receiving ongoing financial advice says it helps them reach and stay on track with their goals, with more than eight in ten (85%) saying they are currently on track or ahead of their financial targets, compared with 64% of those without advice.
Supporting clients through uncertainty is about bringing expertise, perspective and trust. Whatever happens in the upcoming Budget – and whatever rumours surface before it – advisers will inevitably face conversations with clients agitated by short–term noise and tempted to act.
Sometimes action will be the right call, and that is exactly where advisers add value. But it’s equally important that clients don’t lose sight of their long–term goals.
Claire Trott: Planning through the fog of pension reform
Our research shows that advised individuals take a more balanced and long–term approach: nearly half (49%) of those receiving ongoing advice aim to balance both short– and long–term goals, compared with under a third (31%) of those without advice.
There is a fine balance between acting and not acting when the future is uncertain. Take the pensions and IHT changes due in 2027. We are reasonably confident they will go ahead, so acting now might seem logical. But what is the downside if something changes between now and then – or if, dare I say it, we see a U turn, however unlikely?
The answer isn’t the same for everyone, and advisers are best placed to challenge their clients – and themselves – on the right approach.
So yes, we should listen for the fire alarms. But not every sound requires an evacuation. Irrevocable action should be avoided where possible, and factoring in all the variables is key to delivering great holistic advice.
Claire Trott is divisional director, retirement and holistic planning, at St James’s Place
