Financial advice for older consumers: What IFAs need to know
By Kirsten Hastings, 23 Feb 16
Older consumers are a diverse population, with different beliefs, behaviours and needs, all of which affect the way in which they interact with money and financial services, according to a new discussion paper from the Financial Conduct Authority. So, what do IFAs need to take into account to meet their needs? Click through the pictures below to find out.
“With the introduction of pension freedoms offering even greater control and choice over our pension funds, the need for professional advice to deliver the benefit of effective financial planning has become even more evident and valuable. An ageing population in the UK presents substantial, complex and increasing challenges not only for government and regulators, but also the financial services industry too.
“Increasing access to relevant financial advice, innovative products and support services, at a price that is affordable, represents both an opportunity and a challenge. Hand-in-hand with that is the need to continue to re-establish consumer confidence in the financial services sector more broadly.
“Ultimately, restoring integrity will require greater understanding by the consumer of the financial landscape and the value of advice in terms the consumer can directly relate to, supported by proportionate and balanced reporting in the media. That said, the good news is that recent research indicates that consumers over the age of 55 are more likely to be influenced positively by financial advisers and although the metric used decreases after the age of 75, it still remains positive compared to many other alternatives.
“Given their desire and commitment to deliver the best advice possible, underpinning these issues is a need for advisers (and policymakers) to keep up-to-date with trends in longevity and morbidity as well as typical patterns of consumption and expenditure during retirement.
“It is critical that guidance efficiently sign-posts individuals to qualified regulated financial advice when appropriate to help them maximise their financial position and provide certain protections. Unlike some other demographic segments, the older consumer typically has little time to recover financially.”
