Your pension in your pocket
Our app makes it easy to keep an eye on your pension and plan for the future.
Value of advice on the rise post-Consumer Duty
Ross Easton
Scottish Widows Platform, Head of Platform Proposition
8th January 2025
More than four in five (82%*) people who have a financial adviser believe it represents ‘value for money’ - an increase of 10% from 2023 **, according to the latest Scottish Widows Investor Confidence Barometer.
With value for money front and centre in the advice market following the introduction of the Financial Conduct Authority's Consumer Duty, this finding will be welcome news for advisers.
Accessibility and cash-flow modelling highlighted as measures of value
Digging deeper into various aspects of advice, the Barometer has found that advisers and clients agree that accessibility is paramount. A resounding nine in ten (90%**) advisers surveyed believe that being contactable is important, with almost all (96%***) surveyed advised clients agreeing with them. Meanwhile, 96%*** of advised clients consider portfolio performance a top priority – this indicates that accessibility and performance rank equal in the minds of advised clients.
Additionally, both advisers and investors agree that specific tools such as cash flow modelling are important in demonstrating the value of advice, with younger advisers (88%) particularly positive about their benefits. Clients are even more enthusiastic, with 82%*** of surveyed advised clients citing them as important.
Geopolitics top concern for advisers
In the face of a soaring US stock market, characterised by dramatic two-way volatility, advisers are taking fewer risks than last year. The previous Confidence Barometer found that more than three-quarters (77%) of surveyed advisers said they expected equities to rise over the next twelve months. In 2024, that number has dropped to 64%.
Four in ten (40%) surveyed advisers cited geopolitics as the biggest risk to equities. By contrast, investors are more worried about inflation; one-third (33%) of surveyed non-advised consumers and 31% of advised consumers think it is the biggest risk to equities.
Advisers are much more confident about equities than investors over long-term horizons. Over five years, the vast majority (89%) of advisers expect markets to rise compared to just 63% of advised consumers and 57% of non-advised consumers. Similarly, over ten years, 91% of advisers expect markets to rise versus 68% of advised and 57% of non-advised consumers. The fact that advised consumers are more bullish than non-advised investors, over all time periods, underlines the value of advice and the behavioural coaching that advisers provide.
“This survey emphasises the difference that advisers make for their clients, especially when it comes to guiding them through times of market volatility. Our Barometer has consistently found that advised clients are more confident than non-advised investors, setting them up to benefit from market corrections and recoveries when others are more cautious.
“It’s also clear from our research that advisers believe that having cutting-edge tools helps them to showcase the value of advice to their clients via coaching on stock market trends and scenarios. Over the last year, we’ve integrated a comprehensive stack of innovative tools, including cashflow modelling applications like Voyant and EVPro, to ensure that advisers have a full range of options to help them communicate their advice to clients in a way that’s intuitive and engaging.”
Ross Easton, Head of Platform Proposition, Scottish Widows Platform
Notes
* ’Strongly agree’ and ‘Somewhat agree’ answers combined.
** Scottish Widows Investor Confidence Barometer published November 2023.
*** ‘Important’, ‘Very important’, and ‘Essential’ answers combined.
Notes to editor
The Scottish Widows Investor Confidence Barometer is a twice-yearly survey of over 1200 people conducted by Censuswide and Research in Finance for Scottish Widows Platform, which surveyed the following groups between the 16th and 27th September 2024:
- 501 advised consumers (those that have a financial adviser) with a minimum of £100k investible assets, who have a pension and are aged 35-70.
- 500 non-advised consumers (those that do not have a financial adviser), with a minimum of £100k investible assets, who have a pension and are aged 35-70.
- 200 (18+) financial advisers who have clients, with a representative split by age of the UK adviser population.
About Scottish Widows
Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With more than £226bn assets under administration and 10 million customers, Scottish Widows’ award‐winning product range includes workplace and individual pensions, annuities, life cover, critical illness and income protection, as well as savings and investment products.
More than 2 million customers access Scottish Widows products and services through the Lloyds Bank and Scottish Widows apps, in addition to accessing directly through independent financial advisers. The Scottish Widows Platform is trusted by more than 18,000 advisers and 5,400 advice firms, that manage the pensions and investments of almost 166,000 clients.