Advisers urged to make retirement planning a ‘family affair’ amid participation gap

Financial advisers should make retirement planning a ‘family affair’, with UK advice firms facing a participation gap, according to Scottish Widows and NextWealth.

Their research of advised clients and advisers showed that 52 per cent of individuals said only one partner regularly attends review meetings, while 26 per cent admitted adult children were not involved in financial planning at all.

More than a fifth (21 per cent) of advisers said beneficiaries were not involved in annual reviews, which Scottish Widows and NextWealth said left wider family members outside of long-term financial decisions.

Advice relationships were found to often be centred around a single primary contact, with 51 per cent of clients saying they held the adviser relationship in their name only.

More than a third (37 per cent) of couples stated that while they try and attend meetings together, only one party actually attends in practice.

One in 10 said they always go to meetings on their own, preferring to update their partner afterwards.

The research also identified a gap in how some advice firms engage secondary partners, with 20 per cent of advisers not confident they understood the goals of their clients’ partners and 3 per cent having a defined formal process for them.

While 86 per cent of clients would recommend their adviser to someone else, 19 per cent said they did not feel recognised as an individual and 48 per cent felt their adviser sometimes used terms and phrases they did not understand.

“Research points to the fact that advice can no longer be a one-person conversation,” commented Scottish Widows intermediary wealth director, Jenny Davidson.

“Excluding partners and family members risks weaker outcomes today and broken client relationships tomorrow.

“There's a lot at stake here. Women are set to be the major beneficiaries of an estimated £7trn transfer of wealth over the next 30 years.

“Meanwhile, changes bringing unused pensions into scope for inheritance tax from April 2027 will make conversations across generations even more important.

“Advice firms that adapt their approach and engage partners, beneficiaries and wider family members earlier will be better placed to understand their clients’ needs, deliver stronger outcomes and build relationships that endure as wealth passes between generations.”

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