Expert Comment

Five things to watch out for in 2022

When predicting the next twelve months, there are a large number of trends that could take the limelight over the next year. But what if you were limited to just five? Patrick Brusnahan asks the experts

Andrew Aldridge, partner, Deepbridge

  1. Estate Planning – with IHT receipts continuing to rise and with perhaps a greater acknowledgement of mortality driven by the pandemic, inheritance tax mitigation will remain a key focus for many advisers. Earlier this year, we surveyed over 100 IFAs, with 80% agreeing that estate planning was a primary consideration;

  2. Growth – with inflation increasing and rumours of interest rate rises, the search for growth will be important for many investors. Hardman & Co recently released a paper showing how early-stage private equity stocks, such as those available via the Enterprise Investment Scheme, can dramatically increase returns for a majority of clients, without altering their overall risk profile;

  3. Green and ethical investing – COP26 once again highlighted the need for investment in green energy and renewable technologies. The UK Government continues to press ahead with ambitious plans to increase the availability of electricity from renewable sources and advisers need to be considering how they include renewables within a client’s portfolio;

  4. Soft Facts – with the increasing use of esoteric products, such as tax-efficient investments, which perhaps sit outside of centralised propositions it is ever more important that advisers record ample soft facts for compliance and technical support to review advice decisions more clearly. In our experience, when advisers say ‘compliance says no’, it is usually because they have not provided enough reasoning, and

  5. Customer Service – how advisers and clients decide what customer service looks like in the future will be a key consideration. An example being, whether clients want to return to annual review meetings face-to-face, or are they more confident now using video-conferencing and perhaps prefer more regular meetings via this medium?

Andrew Aldridge, partner, Deepbridge

David Lawrence, UK chief executive officer, Kingswood Group

  1. Digitisation – there will remain a constant need to enhance the client experience by actively using technology but in concert with a human centred approach;

  2. Pricing – breaking the taboo and creating greater transparency so that clients feel confident around charges and that they represent value for money. However, industry wide margin pressure will continue in 2022;

  3. Consolidation – the industry remains fragmented and with continued regulatory and administrative pressures, IFA’s will continue to seek exit strategies throughout the year;

  4. Regulation – will help drive consolidation but will also put pressure on the industry. It is vital that there is fair and transparent treatment for clients across all avenues of service and offering, and

  5. Addressing the advice gap – large demographics are under-served. Specific focus areas should be Pension Planning, Long-Term Care and gender differences. The industry also needs to boost financial education to increase resilience and understanding across all demographic segments and look at how we effectively educate the younger generation.

David Lawrence, UK chief executive officer, Kingswood Group

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