Pension transfers are still considered to be among the top business opportunities for financial advisers in 2020, research from Intelliflo has found.
A survey conducted among 360 Intelliflo Intelligent Office users found client recommendations was thought to be the best business opportunity of 2019 for advisers, with pension transfers following in second.
For 2020, however, advisers predicted client recommendations would still be the biggest opportunity, but recruiting extra staff moving up to second and pension transfers following in third.
The last 12 months have proved challenging for advisers holding pension transfer permissions, with some being contacted by the Financial Conduct Authority (FCA) following the regulator's data dive into the sector in 2018. Others have seen their professional indemnity premiums rise.
When asked about the challenges advisers faced in 2019, advisers responded by saying regulation was the biggest and predicted it to continue to be difficult in the next 12 months. At the same time, regulation was seen as an opportunity, considered by respondents to be the fourth biggest opportunity facing the sector in both 2019 and 2020.
Cyber-security was the second biggest challenge advisers faced last year, according to respondents, but Brexit was predicted to be the second biggest challenge facing the sector in 2020.
Intelliflo chief executive officer Nick Eatock (pictured) said: "It's no surprise that regulation tops the list of challenges, but it's interesting to see it ranks highly as an opportunity too.
"Regulation such as PROD [Product Intervention and Product Governance Sourcebook] is one regulation that many advisers are still grappling with but, when done well, it can provide huge benefits for clients and advice businesses."
'Year high of drama'
Asked for its views on pension transfers being seen as of the biggest opportunities for advisers and, conversely, regulation being the biggest challenge, Personal Finance Society chief executive Keith Richards said: "2019 has been a year of high drama, topped off with an election. It has been a year when implementation of Markets in Financial Instruments Directive II has still been making its way through the system, with clarity around transaction costs still being an important issue as the investment sector searches for a consistent approach," he said.
Richards said 2019 was "overshadowed" by issues around the clarity of the Financial Conduct Authority's regulatory perimeter with the collapse of London Capital & Finance.
"At the end of 2019, it seems likely that a shrinking market in professional indemnity insurance will continue to impact the number of financial advisers able to review pension transfers radically, as even firms with a completely unblemished track record struggle to find cover at a rate that makes sense for them commercially."
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