Financial advisers are reporting a sharp rise in client anxiety amid widespread speculation over tax and pension changes ahead of next month’s Budget, according to new research by Royal London.
The findings, drawn from the mutual’s annual Meaning of Value study conducted with consultancy the Lang Cat, show that 81% of advisers have seen an increase in client unease in recent weeks, with many seeking reassurance about how to respond to the rumours surrounding the Chancellor’s statement on 26 November.
While most advisers are urging clients to stay focused on their long-term goals, 16% said some investors have already been “spooked” into taking irreversible financial decisions. Only 3% reported that their clients were unaware of the speculation.
REASSURANCE EFFORTS
Two fifths of advisers said they are proactively reminding clients of their long-term plans to counter the effects of short-term market or policy noise.
Around 30% are choosing to wait for clients to approach them before responding, while 16% are taking a more personal approach, reaching out directly to offer reassurance about the robustness of existing strategies.
A smaller group, around one in 10, are monitoring the situation closely and may make pre-emptive adjustments to clients’ financial plans if necessary.
However, most advisers agreed that this year’s climate of speculation is particularly unhelpful. Eight in 10 said that the scale of proposed changes being discussed — from alterations to pension tax relief to the possibility of new wealth taxes — has fuelled unnecessary panic.
PART OF THE JOB
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.”
THE VALUE OF CALM ADVICE
Royal London’s Meaning of Value research tracks how clients perceive the role and worth of advice, particularly during periods of uncertainty. This year’s findings suggest that the ability of advisers to offer calm, consistent guidance remains central to client trust — and to preventing short-term political speculation from derailing long-term financial plans.