Advised clients’ tax concerns growing due to uncertainty

Advised clients’ tax concerns are on the rise amid widespread confusion over rules and allowances, research commissioned by Wealthtime has shown.

The study of UK adults with average investable assets of £350,000 was conducted by Ad Lucem and found 53 per cent of those how had used financial advice in the past three years felt more worried about tax now than a year ago.

Almost half (47 per cent) cited tax rules and allowances as a major source of uncertainty, while 30 per cent said they were confused about pension rules.

Last-minute tax decisions were found to be common, with 52 per cent of advised clients completing most of their tax year end activity in March or April last year, while 24 per cent left it to the final week.

The biggest barriers to acting sooner were a lack of time (28 per cent), fear of making the wrong decisions (27 per cent), and uncertainty about what to prioritise (21 per cent).

Wealthtime highlighted widespread tax year end regret, as 74 per cent of respondents had at least one regret.

The most common was leaving decisions too late (27 per cent), followed by missing an allowance (23 per cent) and keeping too much money in cash (18 per cent).

Wealthtime also published the results from its first Tax Year End Confidence Index, with confidence in tax year end planning averaging 45.7 out of 100.

The index measures how concerned respondents are about a range of tax year end issues, including making a mistake, missing allowances, not having the right information, and not understanding the rules.

Those currently working with a financial adviser scored an average of 48 out of 100, while those no longer taking advice scored 41 out of 100.

Furthermore, just 20 per cent of currently advised clients fell into the ‘low confidence’ category, scoring 40 or below on the index, compared to 45 per cent of previously advised clients.

“Tax year end is becoming increasingly stressful for investors,” commented Wealthtime CX director, Kylie Clark.

“Changing rules and allowances mean even financially engaged clients can feel unsure about what action to take and when.

“What’s clear from our research is that ongoing advice makes a measurable difference. Those working with an adviser feel more confident, more informed and more in control, highlighting the value of an ongoing advice relationship at this critical time of year.”

Ad Lucem founder, Phillip Wickenden, added: “What stands out isn't that clients are complacent, it's that they're cautious. And caution, left unmanaged, looks a lot like procrastination.

“The data consistently shows that reassurance and structure beat urgency-based messaging. Advisers who start earlier, simplify priorities and remove admin friction will convert that anxiety into action.”

---