"This will create some new planning opportunities that advisers need to be cognisant of. However, with everything still very fresh, more information will come out in the next weeks and months and advisers must take note of this and apply it to their client’s financial plans."
Business as usual
Though the work that a financial adviser does might increase, David Hearne, chartered financial planner at Financial Planning Partners, says the fundamental role of the financial adviser remains the same.
“Our role remains first and foremost to help clients achieve their plans and live the life and retirements they desire,” Hearne says.
“As big as this LTA change might seem to us, it is just a change to one of many levers we can pull to help our clients achieve their plans.”
For advisers who help their clients plan for decades ahead, Hearne notes advisers should always expect changes and surprises like this.
This is one reason why maintaining flexibility is so important, so that advisers and clients can easily adapt their plans if a client’s life or government legislation changes.
The bigger challenge, he argues, is to ensure advice is based on legislation and not speculation.
Hearne adds: “Every year there has been speculation that tax-free cash will be removed or reduced from pensions, with many people taking action and taking pension benefits to avoid this possibility. Sadly, some of those who did this in the past may not be able to fully benefit from the actual changes in legislation now.
“It’s a good reminder for advisers to be clear to clients about what we can control and what we cant.”
Ima Jackson-Obot is deputy features editor of FTAdviser
