The increasing complexity of navigating issues regarding family inheritance is resulting in an uptick in demand for bespoke investment services among independent financial advisers (IFA), analysis from Rathbones has found.

Its study revealed that 97 per cent of IFAs expected demand for bespoke portfolios managed by third-party wealth managers to rise due to complexity around decumulation and estate planning.

Rathbones noted that advisers were finding it increasingly challenging to manage larger client portfolios, and deliver tax efficiency and growth to their clients, following changes to tax relief on pensions and estates announced in last year’s October Budget.

Nearly two-thirds (65 per cent) of advisers felt that portfolio management had become more difficult, while 29 per cent believed it had become easier.

Almost all (93 per cent) advisers said that the changes announced in the Budget were driving increased interest in bespoke investment services.

Of those advisers who offer bespoke investment services, 59 per cent were more likely to do so for decumulation and 41 per cent were more likely to offer them during the accumulation phase.

Rathbones’ study also found that 39 per cent were more likely to offer bespoke services to clients approaching retirement, while 15 per cent do so for recently retired clients and 5 per cent for those who had been retired ‘for some time’.

Commenting on the findings, Rathbones head of strategic partnerships, Simon Taylor, said: “Changes in last year’s Budget to inheritance tax (IHT) are having a major impact on advisers and their clients with large investment portfolios, with advisers finding managing both growth and tax efficiency more challenging as a result.

“Furthermore, the FCA’s thematic review on retirement income advice, published in March 2024, is adding increased impetus for adviser businesses to think carefully about investment propositions for their clients, resulting in increased interest in bespoke services.”

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