Retirement advice approaches evolving amid regulatory and policy changes

Financial advisers in the UK are evolving their retirement advice approaches to better navigate client planning needs amid regulatory and policy changes, a report from BNY Investments and NextWealth has shown.

The study, Retirement Advice in the UK: Turning Insight into Outcomes, looked at how systemic changes were reshaping the delivery of retirement advice, alongside the benefits of this for clients and advice firms.

It identified the greatest drivers of change in advice approaches as the upcoming inclusion of pensions in inheritance tax (IHT) and the Financial Conduct Authority’s (FCA) Retirement Income Advice Review (RIAR).

Almost three quarters (72 per cent) of advisers planned to make changes to their advice approach in relation to IHT over the next year.

More than half (53 per cent) planned changes due to the RIAR over the same period, with 48 per cent of these advisers reviewing their investment propositions or model portfolios used for drawdown clients.

While Consumer Duty has been in effect for over two years, 52 per cent of advisers were still planning changes in 2026 in response to it.

Advisers were asked about the concerns they heard most often from retirement clients, with further and proposed tax changes the most commonly cited worry (48 per cent).

This surpassed the fear of running out of money before death (43 per cent), marking a shift from 2024’s survey when this was the top concern (50 per cent).

BNY and NextWealth said the findings emphasised the increasing importance of tax policy and regulatory developments in shaping client priorities and adviser support.

“These findings show advisers are shouldering considerable responsibility amid growing expectations from concerned retirement clients,” commented BNY Investments head of EMEA distribution, Gerald Rehn.

“High quality financial advice, delivered consistently and at scale, is critical to meeting growing demand and clients’ needs against the complexity of today’s retirement landscape.

“Our research shows advisers are moving decisively to evolve their retirement advice approaches and we are committed to helping them do so.”

The report also noted that advisers were developing tailored and consistent approaches to decumulation, with Centralised Retirement Propositions (CRP) becoming increasingly popular.

Although 36 per cent of advisers had a common and consistent decumulation advice model in place for a year or more, 38 per cent had put one in place over the past 12 months or planned to do so in 2026.

The most common reasons for putting a common and consistent decumulation approach in place were to meet regulatory expectations (32 per cent), reduce compliance/business risk (28 per cent), and increase efficiency (20 per cent).

Advice firms were also found to be embracing artificial intelligence (AI) across processes, with 20 per cent using AI to generate meeting notes and summaries, and a further 53 per cent currently implementing or considering it.

Almost a third (30 per cent) were using or implementing AI for suitability reporting, while 38 per cent were considering it.

Advised clients were most comfortable with AI checking forms and applications for missing or inconsistent information (42 per cent) and answering simple service questions via a chatbot (42 per cent).

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