What the Pension Reform Means for Advisers

Five months on from George Osborne's Budget speech, financial advisers are beginning to understand what scrapping compulsory annuities will mean for their industry

J.P. Morgan Asset Management 14 August, 2014 | 11:01AM
Facebook Twitter LinkedIn

This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Jasper Berens, head of UK Funds at J.P. Morgan Asset Management discusses the impact of pension reforms on the financial advice industry. 

UK advisers are going to have to step up to much more comprehensively advise clients on how they take their capital and income from maturing pension pots and furthermore how this works in the context of using their other accrued savings pots or their property to support their changing lifestyles, situations and requirements during retirement. The announced retirement freedoms may create as much as £9 billion market flow in 2015, equivalent to an approximately 40% increase in UK open ended net flows.

That scale of change is going to have enormous impact on how advisers conduct business. Given that more than 91% of current drawdown assets are currently adviser intermediated, IFAs are right at the heart of this. Early consumer surveys suggest that roughly 32% of defined contribution assets will be money-in-motion, either entering drawdown wrappers, ISAs or going into annuities which are not overseen by the pension scheme or trustees. 

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement