The Openwork Partnership has found that advisers are working hard to help clients review their finances in the wake of the Covid-19 pandemic.
Its study found advisers estimate that on average 46% of their clients are engaged in comprehensive reviews of their financial situation in the wake of the pandemic. For 30% of advisers that figure rises to 75% or more of their clients.
The pandemic has had a major impact on advisers and their clients, research found. Advisers estimate that on average 15% of their clients have suffered financial losses during the crisis. Around one in 10 advisers warn 30% or more of their clients have suffered financially.
However, the comprehensive financial reviews are addressing a wider range of issues than just financial losses. The Openwork Partnership research found advisers say clients are most likely to have stopped saving or investing or to have taken money out of pension funds.
Around half of advisers (46%) say they have seen clients stopping saving or investing while 44% have seen clients take tax-free cash earlier than planned on their pensions while 40% report clients have taken money out of pension funds.
37% say clients have been running down savings and reducing their drawdown income while 26% have cashed in investments. 54% of advisers have also seen an increase in clients cashing in on pensions early by taking tax-free cash or going into drawdown during the crisis.
Mike Morrow, chief commercial officer at the Openwork Partnership, said: “The pandemic has undoubtedly had an impact on people’s finances with winners as well as losers.
“With so many changes, it is good to see that more people have been seeking professional advice to ensure their money works hard for them. What might seem like a good idea right now could have negative consequences for you later in life. It’s best to get help from a financial adviser and ensure you have all the details necessary to make an informed decision.”