Majority of advisers expect to offer simplified advice to engage next generation

The majority (59 per cent) of advisers in the UK are likely to adapt their processes to offer simplified advice to some clients, as firms prepare for the next generation of investors, research from Vanguard has shown.

Its study highlighted growing interest in expanding access to advice and engaging the next generation.

Vanguard said the findings suggested firms focused on long-term growth were typically the most receptive to simplified advice models.

The Financial Conduct Authority (FCA) consulted on updated advice rules earlier this year, seeking views on how to make it easier for firms to give simplified forms of personalised financial advice.

Vanguard’s research found advisers saw the potential to use simplified advice as a way of introducing younger clients to financial planning, developing less experienced advisers, and supporting families with intergenerational wealth transfer.

Many advisers linked simplified advice to evolving client demographics and the increased focus on wealth transfer.

They also highlighted the increased urgency of inheritance planning conversations ahead of pensions being brought into the scope of inheritance tax, with many expecting this to accelerate the transfer of wealth to beneficiaries.

On the other hand, interest in simplified advice was found to be lower among firms focusing on succession or preparing their businesses for sale.

Several of these firms reported having sufficient demand from existing high net worth clients and did not see as much need to develop new propositions aimed at different client segments.

Vanguard said the findings suggested that attitudes towards simplified advice were often shaped by a firm’s strategic priorities as advisers increasingly evaluated how different service models can support future growth, succession planning, and evolving client needs.

"What surprised us was the strength of support for simplified advice,” commented Vanguard head of UK adviser solutions and sales, Gillian Hepburn.

“We expected advisers to be interested, but the level of openness was higher than anticipated.

“A clear catalyst has been the growing focus on wealth transfer following changes to the inheritance tax treatment of pensions.

“As more clients consider passing assets to family members, advisers are increasingly focused on how to engage beneficiaries who may inherit wealth sooner than expected and need support as they begin investing. Simplified advice could play an important role in that."

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