Jenny Davidson, director of commercial propositions at Quilter, said advisers had to adapt to support clients during economic uncertainty, as well as deal with regulatory changes throughout the year.
The ongoing cost of living crisis is having a major impact on personal finances, putting pressure on people’s ability to invest in their futures.
Davidson said this has made financial planning more difficult for advisors and their clients.
“High interest rates, market volatility and recession risks continue into 2023,” Davidson said.
“Not only have financial planners had to adapt to support their clients through this challenging environment, but they have also had to be agile in responding to the various government and regulatory changes that have materialized throughout the year.”
The Financial Conduct Authority’s consumer obligations came into force on July 31, and Mr Davidson labeled it a “salient feature for the financial services industry” throughout 2023.
He described the obligation as a “landmark piece of regulation” that symbolizes a shift from “treating customers fairly” to achieving and proving good outcomes for customers.
“This has provided us with an opportunity to truly demonstrate the value of our work to the financial services market,” Davidson said.
He also explained how advisers and savers are having to deal with a “drastic change in the pensions landscape”.
“2023 witnessed the Chancellor’s ‘rabbit out of the hat’ moment with the abolition of the lifetime allowance, which had a £268,275 cap on the amount that could be withdrawn tax-free from pensions.”
Mr Quilter says his analysis shows that those who have reached or are about to reach their previous lifetime limit will see the amount of tax-free cash available to them increase both proportionately and in terms of purchasing power as their pension increases. It has become clear that there is a possibility of a decline.
The company uses domestic bonds to protect long-term savings from the taxman if the pension exceeds the traditional lifetime allowance, something some people have long begun to think about as a way to access tax-free cash. He said that he has introduced new financial planning strategies. .
Three key areas of focus
Regarding future plans, Mr Quilter outlined three focus areas for 2024: the FCA’s sustainability disclosure requirements, a review of its advice guidance boundaries and the general election.
Although the FCA’s sustainability disclosure requirements were only published at the end of 2023, they are likely to become a key element heading into 2024.