Jobs in finance: financial planning in retirement

03 October, 2022Richard Cooper

For many people – including those who are retired are about to retire – personal finance is in flux. But are people getting the guidance they need when planning their finances? And how do you, as a financial adviser, know you’re giving the right advice? Richard Cooper assesses the situation and looks at what you can do to ensure you're supporting your customers and your firm.

Calculator and notebooksIn the last Interactive Investor Great British Retirement Survey which surveyed over 10,000 people,  65% said they used online search tools to find information to retire rather than take financial advice.     

But many consumers who do turn to advice professionals are less than happy with the results.

Data from the Financial Ombudsman Service (FOS) reports an increase in complaints about investments and pensions in the last year. Surprisingly the most complained about product in this category was personal pensions

FOS reports two main reasons for these complaints:

  • poor recommendations for pension arrangements, and
  • receiving wrong or incomplete information about a pension, leading to a loss of income or annuity payments at retirement.

The FCA’s new Duty of Care

The Financial Conduct Authority’s (FCA’s) upcoming changes under Duty of Care require you “avoid causing foreseeable harm to retail customers”. That means you need to consider anything that may be deemed “foreseeable” along with its potential impact on your customers.

That’s quite a challenge, especially when the economy is volatile. But the new Consumer Duty also emphasises the value of holistic financial advice.

The FCA is right to recognise how important this is because retirement isn’t just about pensions anymore. 

People don’t retire in the way they did 20 or 30 years ago. Many will continue to work part time, or will have income from rental property or another source as well as their pensions. The complex nature of modern retirement – and retirement incomes – mean it’s more important than ever for retirement planning advice to be holistic.

Judson Henry is a Financial Planner at Nationwide Building Society and recently studied our Level 6 Financial Planning In Retirement (FPIR) qualification. He says, “You’d be surprised how many customers don’t really know what retirement’s going to be like.”

He adds that the move away from defined benefit schemes has changed the nature of retirement planning significantly.

“Now that people don’t have a guaranteed income and are more responsible for planning their retirement, they’re going to need a lot more help. A customer asked me the other day, ‘Do I have enough in my pension to retire?’ And you need to be able to say to them, ‘Well maybe’.”

How to become a holistic financial adviser

FPIR is a standalone Level 6 qualification that will help you support your customers better. It will teach you how to take a more holistic approach to financial planning in retirement – just as the FCA suggests.

FPIR will teach you – or your teams – how to:

  • use cashflow modelling
  • encompass all your clients’ potential revenue streams and assets, and
  • take advantage of any available tax allowances.

To do that well, you need to able to ask difficult questions, for example about long-term care, health, life expectancy and funeral planning. FPIR will help you learn how to ask your clients those questions.

The learning material and assessments reflect real client situations and circumstances. Matthew Goodall of NFU Mutual, told us studying FPIR has helped him have deeper conversations with his clients.

"It’s given me a better understanding, which instils trust in the clients. That’s massively important when you’re an adviser.”

Becoming Chartered in Financial Advice

As a Level 6 qualification, FPIR also counts on your journey to chartered status. Sarah Seeley, a company director at Kind Wealth says that chartered status has enabled her to be taken more seriously as a young professional.

“The truth is clients don’t see the difference between who’s chartered and who’s not. My experience is other professionals I’ve worked alongside are more interested in whether you’re chartered or not.”

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