Advisers find evidencing tax wrappers 'takes more effort' in current environment

Over four in five advisers (85 per cent) and paraplanners (83 per cent) find evidencing tax wrapper decisions takes more effort in the current environment, AJ Bell has found.

As part of its latest Great Wrapper Reset report, the firm found that while 99 per cent of advisers evidence why they choose a wrapper, this falls to 70 per cent for those who also evidence why alternatives are rejected.

Furthermore, less than 60 per cent are consistently able to document the circumstances that should trigger a review in future.

AJ Bell said advisers and paraplanners face these decisions routinely, and continue to deliver "great outcomes and peace of mind" for clients.

It said its research has presented advisers with multiple wrapper scenarios, both familiar and adapted to the more complex tax environment.

While most navigated these scenarios tax efficiently, only 34 per cent reported feeling confident in the outcome.

AJ Bell is providing a Great Wrapper Reset resource hub, which gives a practical wrapper reset framework alongside a range of other support for advisers and paraplanners when making wrapper decisions.

This includes potential steps such as using a short "rejected options" prompt in suitability templates and recording events like tax status change, death, gifts, or a government measure that may warrant a fresh look at a client’s wrapper choice.

AJ Bell senior technical consultant, Lisa Webster, stated: "In a world of dizzyingly complex tax planning concerns, financial advice is more important than ever. But advisers can only do what they do best with confidence when they have the tools and support required from providers.

"That means making wrapper decisions that provide the best outcomes for clients as well as evidencing the reasons why alternative wrappers were rejected and circumstances that should trigger a future review.

"We know advisers and paraplanners do not always have the time or resources to comprehensively document the entire wrapper decision process, which is why we have developed a Great Wrapper Reset framework and practical tips to help with this.

"Alongside the vast expertise on our technical team that advisers and paraplanners can tap into, and our genuinely wrapper agnostic proposition, we hope to ensure that advisers can save valuable time and confidently continue to provide peace of mind to clients in the current tax environment."

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