Nearly half or 46 per cent of financial advisers report clients withdrawing funds to cover essential bills and address immediate income shortfalls, according to Standard Life.
The research by Standard Life also highlights that 35 per cent of advisers have seen clients deviating away from previously established plans by withdrawing funds.
Moreover, around 36 per cent of advisers have noted clients withdrawing money to establish ‘rainy day funds’. Standard Life says this trend is attributed to the economic uncertainty and challenges of recent years, prompting individuals to proactively save against unforeseen emergencies and financial shocks.
The uncertainty in the economic landscape has influenced investment decisions as well, with 3 in 10 or 29 per cent of advisers seeing clients choosing to shift their investments towards lower-risk options to mitigate potential market volatility.
Standard Life retail advised managing director Chris Hudson says: “The economic backdrop is having a stark impact on people’s finances, causing many to reassess their plans. There’s a lot to contend with – from sky-high mortgages, rising interest on debts and ever changes tax rules – and it’s important to factor all of this into financial planning.
“In this increasingly complex environment, financial advisers have a crucial role to play in navigating their clients through it all and helping them withstand the turbulence as best possible. This will give peace of mind to clients, as well as hopefully help them weather the financial storm.”
AKG communications director Matt Ward says: “We simply cannot get away from the conversation about the seismic impact of the past few years on UK consumers, nor should we. What has been experienced needs to be acknowledged and understood by the financial services industry so that a positive future can be built upon from here.
“And whilst not all of this will make such positive reading it should help to plot a path through vulnerable customer and Consumer Duty development strategies, as well as enabling advisers to prove how helpful they can be.”
