What do advisers want from next govt?

On July 4, people across the UK will be heading to polling stations, including advisers, but what does the profession want to see from the next government? 

FT Adviser looks at what advisers want the next government to prioritise.

Pensions

Jonathan Hives, chief executive of First Sentinel Wealth, felt there was some mystery around how pension members and pensioners will be treated if Labour come into power. 

He said: “Labour have committed to bringing back the LTA, it is quite extraordinary how one government can remove such a significant bit of legislation, and a rival party brings it back months later. 

“Is it even possible for Labour to bring it back so quickly? I am not sure how they intend to navigate those complexities.

"LTA is such a complex area of planning; anyone trying to take advantage of the current rules should approach with caution and take regulated financial advice.

“Additionally, will Labour lower the annual allowance from £60,000 to £40,000? This will be a monumental mistake if they do. We need to encourage people to save for their retirement, and I would argue the annual allowance should be increased and not decreased.”

Craig Ritchie, partner at GSB Wealth, said he would like to see the state pension triple lock extended to all UK expats.

“Currently, the state pension triple lock, which guarantees annual increases, does not apply to many expats living outside the UK.

"Extending this protection would ensure fairness and provide financial security to all who contributed to the UK’s national insurance pot, regardless of where they choose to spend their retirement,” he added. 

Victoria Nabarro, financial planner at Veda Wealth, said: “Stability in pension legislation would help plan for the future without the concern of future rule changes. Furthermore, simplification of the complex pension rules would aid advisers and their clients in planning for retirement.”

Tax allowances 

Lisa Meller, founder of the Personal Finance Movement, would like the next government to review tax allowances which have been “significantly” reduced this tax year.

She added: “Crucially I want the government to review the maximum value of a property for the purposes of using the Lifetime Isa for a first property purchase which has been stuck at £450,000 since 2017 now despite rising property prices.”

Anthony Carty, group financial planning director at Clifton Asset Management believed there was more uncertainty regarding financial planning because it was difficult to second guess what a new chancellor may or may not announce during their first Budget.

However, he recommended maximising allowances before the election to create some personal certainty.

Ritchie said he would like to see the recent reduction in capital gains tax reversed. 

He explained: “The recent reductions in the CGT allowance impacts our clients and all investors, bringing gains for those with modest portfolios into the tax net. Reversing the reductions to provide a more generous CGT allowance would benefit small investors and reduce complexity in investing."

Ritchie also suggested that to attract talent and skills back to the UK, tax incentives could be offered to returning UK expats and other foreign professionals.

“These incentives could include a reduced tax rate or other benefits for the first five years of their return, an example being the Dutch 30 per cent facility. Such measures could make the UK a more attractive destination for skilled professionals, enhancing the country's global competitiveness."

Stability 

Liz Andrews, director of financial planning at Prydis Wealth said it was easy to get excited about individual policy changes but in reality she felt advisers want stability, regardless of who wins.

“Financial plans are long term, so clarity on tax and regulation are essential. And, if policies are implemented, advisers will want confidence it’ll last the next parliament and hopefully beyond. This will give confidence for individuals and businesses to make long term decisions and investments and should encourage nascent interest in ‘UK PLC’ that has been seen in recent months.

“Investors are told not to try and time the markets, the same probably applies to advisers and politics. Play what is in front of you and control what you can control,” she added.

Ritchie also highlighted the fact that advisers and clients value stability and predictability in the economic and regulatory environment.

He explained: “Sudden changes in tax laws and economic policies create uncertainty, complicating long-term planning. A potential new government should prioritise clear communication and phased implementation of any major changes.

"This approach would help advisers provide better guidance to clients and foster a more stable investment climate and economy."

Regulation 

Nabarro said she would like to see a simplification of the “complex regulatory regime”. 

“This would streamline the advice process, making it less costly for advisers and therefore our clients, making advice more accessible and inclusive, which is much needed,” she added.

Rob Atherton, chartered financial planner said he would like to see the next government work more closely with the FCA and for it to “start trusting advisers again”.

He said: “If the starting point is that it is better to not authorise an adviser or firm because that ensures no foreseeable harm to a client we have no chance of closing the adviser gap. 

“It also enforces the negative perception of advisers fuelled by a click bait hungry press. Financial advice in the UK leads the world in terms of delivering exceptional client outcomes. We have more chartered advisers and firms than ever. Let’s start celebrating and encouraging growth of our profession from a positive starting point.”

Atherton also wanted the next government to ensure consumer duty brings “providers into the modern world”.

“It is simply unacceptable for a pension transfer to take 3-6 months when pretty much everything else in the world now is instantaneous. Advisers get stressed, disheartened and demoralised when dealing with providers that don’t invest in good back office systems and people. It is also hugely detrimental to good client outcomes.”

Both Nabarro and Atherton also stressed the importance of having financial education added to school curriculum. 

Despite the above, Alan Smith, chief executive of Capital Asset Management believed whoever is in power was “largely irrelevant”.

He said: “Financial planners will be getting on with their vital role in helping their clients achieve their personal and financial goals and can largely ignore the inevitable circus that will unfold over the next few weeks.

“Politicians come and go but the aspirations of client families remain, capital markets don’t care who is in power and it will be the thoughtful advisers’ role to reassure clients that whatever happens on July 4 their adviser will help them navigate an uncertain future.”

alina.khan@ft.com