The impact of inflation and clients running out of money sooner than expected are the biggest harms to consumers in retirement, IFAs have said.
Some 58 per cent of IFAs see inflation reducing spending power during clients’ retirement as the most significant foreseeable harm facing consumers in the context of the consumer duty, a study has shown.
Data collected from 221 financial advisers shows a similar number said clients running out of money sooner than expected was also a concern.
In the context of the consumer duty, what do you see as the most significant foreseeable harms facing clients in retirement?
Source: Aegon and NextWealth
Over half (56 per cent) said clients having insufficient savings to meet their needs was a big concern, with 45 per cent pointing to clients making poor decisions on accessing benefits.
The advisers were questioned between November and December last year by Aegon with Nextwealth, for the latter’s latest managing lifetime wealth planning in the UK report.
Pensions director at Aegon, Steven Cameron, said one of the most notable requirements in the consumer duty is firms acting to avoid causing customers foreseeable harm, and this is very important as well as complex for retirement advice.
“Advisers see the most significant foreseeable harms facing clients as the reduction of spending power due to inflation, exhausting money sooner than expected, or having insufficient savings to meet needs,” he said.
“Each of these risks are based on uncertain future events.
“The number of potential harms and the way they can interact demonstrates the real value of advice at and in retirement.”
sally.hickey@ft.com
